Mortgages Frozen During Shutdown - | Montana's News Leader | Billings, MT

Mortgages Frozen During Shutdown

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As politicians in Washington continue debating on ways to end the shutdown, people at home continue to suffer.

Even though it's only been a few days since shutdown, an impact is being felt. How are federal home loans, such as FHA's, affected?

Some have voiced confusion on whether or not, first time or single family home loans are able to be submitted to the federal government during the shutdown.

"Tax transcripts come from the IRS, so we need tax transcripts for conventional loans, RD loans and FHA loans. So every type of loan we do for a single family home, requires that tax transcript," says Mann Mortgage professional, Greg Ando.

But this is where the problem arises, the federal loan officers responsible for submitting these tax transcripts, are furloughed, which in turn, causes a snowball effect of back logged transcripts.

But aside from all the bad, there is a positive element to this government down spin.

"When the congress shut down, the stock market kind of took a dip down. When that happens, investors are looking for another place, a safe haven to put there money," says Ando.

For many, that safe haven is found in mortgage backed securities, or financial investments secured by real estate, which causes interest rates to improve.

"Now is actually a really good time if people were thinking of re-financing, or sitting on the fence looking at buying that home, is to make those offers and get those interest rates locked now."

Some financial experts say that if you don't get a rate now, and the government shutdown goes past the fiscal cliff deadline, mortgage rates could drop even further.