If Prolonged, Shutdown Will Increasingly Hurt Mortgages, Housing, and Economy – MBA's Stevens

With the government shutdown now in its third dayrnand the debt ceiling deadline looming there are increasing signs that some financialrnplayers are growing less sanguine.  This morning, David H. Stevens, Presidentrnand CEO of the Mortgage Bankers Association (MBA) released a statement sayingrnthe effect of the shutdown will grow larger the longer it continues.  A temporary shutdown will most affect federalrnemployees, he said, “However the longer it goes, the greater impact it willrnhave on borrowers, the housing market and the national economy.”</p

Many ofrnthe items lenders need to process loans, tax transcripts, social securityrnnumber verification, or FHA home loans will be delayed because of reduced functionality fromrnHUD, IRS, and the Social Security Administration, he said.  “Differentrnloan programs have different requirements, and these disruptions impact lendersrnin different ways, leading to confusion and fear among borrowers about whetherrnthey will be able to close on a home purchase or refinance.”  Stevens noted there would also be significantrnimpacts on multifamily lenders as well, especially rental housing propertiesrnawaiting FHA financing.</p

“The furloughs can disrupt time-sensitive mortgagerntransaction deals by interfering with borrower lock agreements and causingrninterest rate disparities from the time of closing to the time the loan isrnsecuritized.  For these reasons therernmust be a resolution so that borrowers and lenders are able to return tornbusiness as usual.”

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