The Ellis Team was supposed to have a closing December 31. We represented the seller. The buyer selected a lender from CA who gave a pre-approval letter. It turns out, the buyer had no chance of closing with that lender. They said they were just waiting on IRS tax transcripts, and since the government was shutdown, they had to put the loan on hold. So, even with IRS transcripts, the loan would never have closed under the program they selected. Has government shutdown affected mortgages and closings?
Upon missing the closing date, we decided to get a lender we use regularly involved. The buyer agreed, as they wanted to buy the home. Our lender looked at the file and said they would not qualify, even if they added a co-borrower. However, if we switched them to an FHA loan, we’d have a chance as they are more forgiving on loan ratios.
Many lenders cannot do a FHA loan with a government shutdown. Many lenders can’t do a loan without an IRS transcript. We were able to get an FHA loan in 13 days, bypass the transcript issue, and get flood insurance, all during the government shutdown. How did we do it, and in 13 days nonetheless?
It took some hard work on everyone’s part, especially the lender. We worked with a direct endorsement FHA lender who does not need an FHA underwriter to approve the loan. Secondly, they made this loan a priority for us. Lastly, we had the buyer assume the seller’s flood policy, so we were good to go, even amidst a government shutdown. Both buyer and seller were ecstatic. We could not have done it without the help of our lender, title company, and a buyer and seller working together to make it happen.
Has Government Shutdown Affected Mortgages and Closings
So, let’s give you an update on how the government shutdown is affecting other real estate closing throughout the country.
Flood Insurance – FEMA announced on December 28th that they would resume selling new policies and issuing renewals again.
IRS Tax Transcripts- Many top lenders are waiving IRS (4506-T) tax transcript verifications to fulfill a loan as they are unavailable now.
Nationally Realtors say that 9% of transactions involve a federal employee and the transaction is on hold. 13% have been impacted by the transcript issue, although there are workarounds for this with certain lenders.
The bottom line is the government shutdown isn’t having a huge impact on closings yet. Any disruptions in closings can have a large impact on the overall economy as real estate generally impacts about 32% of GDP.
In uncertain times it pays to work with real estate professionals and lenders who have a track record of solving issues as they pop up. Good Realtors know who the good lenders are.
Inventory has been rising, so selecting a professional who will market your home and make it stand out is important today. Hopefully that same agent also knows how to get the home closed once they find a buyer, because in a rising inventory environment, you never want to have to sell the home twice. It pays to get the home closed the first time.
If you’re looking to buy a home, give our team a call. We can get you pre-approved and get your home closed. Just because a lender approves you doesn’t mean they can close you. Experienced agents know that a mortgage pre-approval does not mean you have a guaranteed closing. We can get you working with a lender with a track record of closing loans.
If you’d like to search for your dream home, check out www.LeeCountyOnline.com It has all the homes on the MLS, and it’s updated every 5 minutes. No more missing out on hot new properties because the site you’re using doesn’t have it.
If you’re thinking of selling your home, always call Sande or Brett Ellis 239-489-4042 Ext 4. Brett and Sande handle the listings on the team. Let us show you how our marketing will set you apart and get your home to the closing table.
Good luck and Happy Selling!