Monday, October 7, 2013
Private lenders can give loans during government shutdown
A private lender in Dallas says the shutdown won't affect its ability to close loans on time.
DALLAS As Joanna told us earlier, the shuttering of Washington, D.C. is taking a toll on the real estate market somewhat. You may recall Paige Phelps, who worked in Dallas for People Newspapers, then for The North Texas Food Bank.
“It’s a USDA rural home loan (I’m in Marfa now) and I’ve been approved,” says Phelps. “It’s just they can’t close on government loans during the shutdown. Due to the government shutdown, USDA is closed until further notice and we are not able to close/fund until we hear otherwise. I have extended the lock through 10/9/13. This is also the same day that the loan completely expires. If we do not close and fund by the 9th, I will need to have updated bank statements and paystubs. We are researching now to find out if that would involve sending your loan back to USDA again to be updated or not. Since we can’t contact anyone at USDA right now, our underwriters are trying to figure that piece out for us. I wish I had better news for you. #killmenow“
Bummer. The folks at Inwood Bank here in Dallas tell me they received several calls from real estate agents who were informed by their lenders that they would not be able to close on their purchase transactions at the end of the month due to the government shut-down.
Well, maybe they need to find different lenders?
“During the mortgage crisis of 2008, it was very difficult for borrowers to find a lender willing to make jumbo loans,” says Robert Poe, senior vice president. “Inwood National Bank was there for borrowers.”
Robert says Inwood Mortgage has set aside a limited amount of funds for a limited time to meet the needs of the local community. Since Inwood National Bank has the ability to fund and retain these loans, the government shut-down will not affect their ability to close these loans on time. As always, they will approve these loans in-house and will use local appraisers to perform the appraisal.
Candy's Dirt: I understand that lenders are not able to verify social security numbers or verify IRS returns because the IRS offices are closed, too? You don’t need these departments to proceed?
Robert Poe: That’s right, because we don’t have to sell these loans in the secondary market. They stay right here under our roof, so we don’t have so many hoops to jump through.
How long before you think this might reach critical levels, if at all?
Whenever it affects someone’s ability to close on a house, it is affecting people and their financial lives and could possibly get worse.
Pegasus News Content partner - Candy's Dirt