With the start of the government shutdown at the end of last week, mortgage approvals may slow down, making homebuying and selling more stressful. The last time the government shut down, some 17 percent of closings were delayed, according to a survey by the National Association of Realtors.
During a government shutdown, IRS employees that are usually tasked with verifying homebuyer tax returns are typically put on furlough. CNBC reports that some IRS workers would be exempt from furlough, however, verifying information and processing mortgage paperwork isn't considered "essential", so those employees would have to stop working.
A loan could also be delayed if a lender tries to verify a Social Security number. That's often required if something in an application doesn't match the information associated with a Social Security number in a credit report or other database, even if it's just a typo. If the lender tries to verify the number with the Social Security Administration, and no one at the agency answers the phone, that borrower could be out of luck.
