Shutdown Holding Back Mortgage Approvals
Washington, DC, Oct. 10, 2013 -- The government shutdown is beginning to take a toll on the housing market as some lenders are delaying mortgage approvals and others have stopped accepting applications completely.
Mortgages backed by the U.S. Department of Agriculture for homes in rural areas are on hold as the agency shut down.
In addition, it’s taking longer to process mortgages that are insured by the Federal Housing Administration, which has been operating with a limited staff.
Some lenders won't originate any mortgages until they can verify applicants’ income with the Internal Revenue Service, which is shut down.
The shutdown could dampen the housing recovery if borrowers can't get mortgages, which could cause sales to drop and prices to fall.