Dave Robison
By Dave Robison
In the midst of the government shutdown, we are still working with our clients to get their deals closed. Yes, the FHA is still committed to getting loans processed, but other government entities are closed, including the IRS. Lenders require a 4506-T form, but the IRS is now unable to fulfill requests. So what does this mean? If your lender requires this, the loan won’t close until the IRS reopens, thus putting your deal at risk. Some lenders are waiving the 4506-T requirement, with income verification to follow later. But you can be proactive and help your clients. Here are some tips:
1. Contact any buyers you currently have under contract and talk to their lender about this. Evaluate your buyer’s current situation and determine if they have the ability to close or not.
2. If the lender needs the 4506-T and doesn’t have it from the IRS, then your buyer’s earnest money may be at risk. Check your due diligence deadlines and possibly extend them.
3. Talk to your sellers and warn them of the potential issue of delayed closings. Be proactive right now so your sellers don’t pack up and then their home doesn’t close. Show them you are a professional and proactive in helping alleviate stress.
4. Renegotiate with sellers on closing dates, if possible. The odds are in your favor, as the only way a seller can close with a different buyer is if they find a cash buyer.
5. Start contacting your representatives in Congress. And while you are at it…donate to RPAC!
6. Stay up-to-date with the government shutdown and its impact on real estate here: www.realtor.org/articles/government-shutdown-updates
If you are seeing any workarounds regarding this issue, please post a comment. Also, if you are experiencing other issues related to the shutdown, let us know!
Dave Robison, known as “Utah Dave,” is broker/owner of UtahDave.com Neighborhood Experts.
Comments 3
I just received word that the Social Security office is unable to process fraud verifications for lenders. A fraud alert comes up when a social security number is associated with more than one name. This often happens when a social security number is mistyped during a routine credit check. According to this lender, very few files are clean. Are others seeing this and are you aware of workarounds for this issue?
Chuck,
I received word from a lender that my client is affected by both the IRS issue and the Social Security issue. Seems to affect self employed clients more because they do not have means to document income.
Thankfully the government shutdown is over, at least for a while. I got next to nothing done dealwise during the shutdown costing my family money we couldn’t afford to go without