The government shutdown is indeed having an impact on San Francisco purchase loans and transactions. Several of my colleagues around town are reporting that lenders are unable to verify tax returns via the IRS (typically required for jumbo and some conventional loans). Additionally, lenders may not be able to get Social Security Administration verification for the purposes of proving buyer identity and reducing potential fraud.
There are definitely reports of open transactions are in holding patterns. As a result, buyers aren’t able to confidently remove financing contingencies—or receive and sign loan documents. In one instance, a seller has a back-up offer for all cash on the table and is seriously considering cancelling the buyer contract with the loan and moving to the back-up offer. Continue Reading