US govt shutdown threatens housing rally

Loan approvals could be delayed, furloughs may crimp demand for homes

[LOS ANGELES] A US government shutdown will immediately slow approval of thousands of mortgages.

If it lasts more than a week, it threatens housing and the broader US economic recovery.

Congress forced the first partial government closure in 17 years after failing to pass a budget, meaning borrowers in the process of obtaining home loans could be delayed as lenders are blocked from verifying Social Security numbers and accessing Internal Revenue Service tax transcripts.

The process may also lengthen the wait for borrowers seeking approval for mortgages backed by the Federal Housing Administration (FHA) because its full-time staff is now less than a tenth of its normal size and the US Department...

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