PGA golfer Dustin Johnson sues Nat Hardwick for $3 million theft

PGA golfer Dustin Johnson sues Nat Hardwick for $3 million theft

Former LandCastle Title CEO was Johnson's attorney and "trusted advisor"

Are record-low interest rates masking high-cost mortgage lending?

Five leading economists weigh in and the answer may surprise you

Auction.com partners with Google to predict housing trends

Nowcast will predict in real time
W S
Lending

Lenders adapt to shutdown

Create temporary policies to process loans

file cabinet
/ Print / Reprints /
| Share More
/ Text Size+

The government shutdown is gradually impacting the mortgage industry, with more lenders creating momentary bypasses to approve loans.

Lenders are required to include a 4506-tax transcript, which allows the lender to pull and verify a borrower's income directly from the Internal Revenue Service.

But this step in the process came to halt once the IRS shutdown with most of the U.S. government.

As a result, banks crafted temporary exceptions to keep businesses running.

If we have loans with all conditions clear except the 4506-T, we will use the borrowers tax return as a replacement, Patti White, vice president of correspondent lending, with Norcom Mortgage, said.

White said lenders will still collect the 4506-T and retrieve the information once the IRS resumes operations to make sure the information is correct.

Meanwhile, Norcom Mortgage is not alone in this, as other lenders like NexBank, which is based in Dallas, also adapt to approve loans.

NexBank said it will allow conventional conforming loans without the IRS tax transcripts as long as the borrower provides a copy of the signed personal tax return for the most recent year.

“We are still closing loans, and we are still going to get what we need in a loan. Since we are a primarily purchase lender, we cannot hold-up our closing process,” White said. 

Once the government resumes operations, the temporary policies will end, and business will continue on as usual.

Recent Articles by Brena Swanson

Comments powered by Disqus