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Mon October 14, 2013
N.C. Mortgages On Hold During Govt. Shutdown
North Carolina banks say the ongoing government shutdown means many mortgage applications are idle.
The Internal Revenue Service usually sends tax records to mortgage lenders to verify a client's income, but IRS workers are among the federal employees who are in their 14th day of mandatory furloughs. Banks are still processing mortgages, but taking a risk if they approve them.
"Basically, what we do is review them, do our due diligence, we close them, keep our fingers crossed, and hope and pray that once we're able to retrieve those tax transcripts, there's no substantial change in the income situation," says Kenneth Sykes, president of North State Bank Mortgage in Raleigh.
Sykes says first-time home buyers are losing confidence in the housing market.
"There are practical day-to-day problems and interruptions that we're having, but then there's the negativity, the fear and the uncertainty. We were on a steady, positive flow of emotions in the home buying process that's probably now been interrupted, and we hate that," he says.
Sykes says there will also be a backlog of applications when the shutdown ends. Those who have put in applications through the Federal Housing Agency or the USDA will likely have to wait until then for a decision.