Lenders Warn a Long Government Shutdown Could Delay Mortgage Loans
Published October 4th, 2013
GAINESVILLE -- 'For sale' signs may remain in the yards of many North Central Florida homes a little longer these days, as mortgage lenders are warning it could take longer to close on a home thanks to the government shutdown.
While it varies from bank to bank, some mortgage lenders require prospective home buyers to sign what's known as a 4506-T form, which allows the lender to obtain a copy of the applicant's tax returns from the IRS. Those are then compared to returns the lender has on file as a way to crackdown on fraud.
But after 90 percent of IRS employees were furloughed this week, the agency announced it will no longer process those requests. Lenders say the mortgage process has not been affected...at least not yet.
"If it were to continue for a long period of time, say three weeks to four weeks, that might slow down the mortgage process," said Shelly Calhoun, a real estate loan manager for Campus USA Credit Union.
While the policy varies, TV20 checked with many of the big banks in our area and found that both Wells Fargo and Bank of America require all mortgage applicants to fill out that form. So if you're in the process of securing a loan from one of those banks, keep in mind it could take a little longer to close on a deal.
Heather van Blokland contributed to this report.
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