With the current government shutdown threatening to become the longest in U.S history, we’re beginning to see disruptive consequences for lenders, homebuyers, attorneys and title companies.
“With each day the shutdown continues, we can expect an increase in the impacts on potential homeowners, home sellers and the entire housing market.” says the U.S. Department of Housing and Urban Development. “A protracted shutdown could see a decline in home sales, reversing the trend toward a strengthening market that we’ve been experiencing.”
Why is the shutdown potentially causing problems for the housing market? Specifically, it has to do with delays in essential paperwork. It’s been reported that during the shutdown only 12% of Internal Revenue Service (IRS) employees are still on the job, and they are limited in their power to process transcript requests crucial to lenders and homebuyers.
The shutdown is causing similar issues for title companies trying to obtain lien payoff information from the IRS. With IRS employees limited or unable to do their jobs under the shutdown, a backlog of essential requests from title companies are piling up. Bill Burding NTP, executive vice president and general counsel for Orange Coast Title Co., described this as a “big problem” for the industry as deals are either being delayed or cancelled.
Nick Hacker, president/ and CEO of North Dakota Guaranty & Title, said one underwriter his company works with has advised against closing deals involving IRS liens. The company is also holding some seller proceeds until the payoffs are confirmed in order to continue closing transactions.
Flexibility and planning will be required to overcome these hurdles, as well as individual companies committed to handling these concerns with care and integrity for the consumer.
Serving West Orange County, Lake County, Sumter County & Marion County