An Internal Revenue Service program integral to the closing process was recently reopened by the Trump administration, after closure for the partial government shutdown.
The mortgage industry pushed for the reopening of the Income Verification Express Service, saying that its closure could have pushed mortgage lenders to pause or halt loan closings all together. The program processes forms lenders use for borrower income verification, and is typically required by Fannie Mae and Freddie Mac to be submitted before the loan is eligible for their purchase; the Federal Housing Administration, which insures 11 percent of all single-family residential mortgage debt, also uses the program. Realtor.com reports that with the reopening, roughly 400 IRS clerks were able to return to work.
In a statement last week announcing the revival of the program, the IRS said it recognizes “the immediate hardship incurred if information is not available” to mortgage lenders. John Mechem, vice president of public affairs at the Mortgage Bankers Association, said in addition to urging the Treasury to reopen the income-verification system, his group took steps to help federal employees affected by the shutdown by ensuring they don’t receive a hit to their credit scores if they enter into a forbearance with their mortgage servicers.
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