If Prolonged, Shutdown Will Increasingly Hurt Mortgages, Housing, and Economy - MBA's Stevens
With the government shutdown now in its third day
and the debt ceiling deadline looming there are increasing signs that some financial
players are growing less sanguine. This morning, David H. Stevens, President
and CEO of the Mortgage Bankers Association (MBA) released a statement saying
the effect of the shutdown will grow larger the longer it continues. A temporary shutdown will most affect federal
employees, he said, "However the longer it goes, the greater impact it will
have on borrowers, the housing market and the national economy."
the items lenders need to process loans, tax transcripts, social security
number verification, or FHA home loans will be delayed because of reduced functionality from
HUD, IRS, and the Social Security Administration, he said. "Different
loan programs have different requirements, and these disruptions impact lenders
in different ways, leading to confusion and fear among borrowers about whether
they will be able to close on a home purchase or refinance." Stevens noted there would also be significant
impacts on multifamily lenders as well, especially rental housing properties
awaiting FHA financing.
"The furloughs can disrupt time-sensitive mortgage
transaction deals by interfering with borrower lock agreements and causing
interest rate disparities from the time of closing to the time the loan is
securitized. For these reasons there
must be a resolution so that borrowers and lenders are able to return to
business as usual."