Republicans and Democrats in congress agreed to lift the debt ceiling and restore the funding required to run the government. For mortgage customers with an application in progress, this is good news. There are three reason why the government shutdown could affect a potential borrower. The first is that all applications for a government mortgage like FHA, VA, and USDA loans require income verification via an IRS form 4506T. This form is required to check the income claimed by the borrower against the income reported to the IRS. Any discrepancy here will require an acceptable explanation. The next reason is a social security number validation from the social security administration. For obvious reasons, this prevents identity theft and verifies eligibility for government loans such as citizenship. The last reason is address verification via the US post office.
Most mortgage banks introduced stop-gap measures to suspend these requirements, however it was only a temporary plan and no one was sure what would happen if a loan was originated that later had issues with any of these verification's. Thankfully, since the government has been restored, we won't have to find out.
Most mortgage banks introduced stop-gap measures to suspend these requirements, however it was only a temporary plan and no one was sure what would happen if a loan was originated that later had issues with any of these verification's. Thankfully, since the government has been restored, we won't have to find out.
