Mortgage Loans AFTER the Government Shutdown May Face Delays

iStock_000001750148XSmallMost 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! 


  1. I’m shocked that the entire transcript process isn’t entirely automated.

    • I don’t know, Kary… one would hope the government could do something that is streamlined and makes sense.

      • Christopher Lutz says

        Nope missed new house settlement yesterday because we are still waiting for 2011, 2012 tax transcripts!! Our government is a worthless pos. Sorry but this has been a nightmare. Currently living out of car basically because the closing of the house we sold was same day.

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