Most of our lenders are being flexible about receiving IRS tax transcripts during the government shutdown. However, once the shutdown is over, expect lenders to require IRS tax transcripts to be included on every transaction…and expect possible delays.
Lenders obtain tax transcripts on transactions to make sure the income provided on the application and other supporting documentation matches what is filed with the IRS. This is largely due to the fraud that happened during the mortgage meltdown.
Typically, it takes a couple weeks once a person has filed their taxes with the IRS before the tax transcript can be obtained. If it’s during a busier time of the year for the IRS (such as April or October), it may take several weeks before the tax transcript is available. Under normal (non-shutdown) circumstances, lenders will not close without the transcript.
Once the shutdown is over, the IRS will experience an enormous backlog of requests for tax transcripts. And if lenders require tax transcripts in files before funding once the shutdown is over, it may cause severe delays. The longer the shutdown continues, the more the backlog will build.
I hope I’m wrong!