Hundreds of AL mortgages on hold due to shutdown - Montgomery Alabama news.

Hundreds of AL mortgages on hold due to shutdown

Source: MGN Online Source: MGN Online

Hundreds of North and Central Alabama residents are in a holding pattern for mortgages because of the government shutdown.

First Federal Bank's Barry Thompson said there's really two main mortgage programs that are feeling the hurt. According to Thompson, the Department of Agriculture's rural development loans are unable to be processed. The employees that review the applications are currently furloughed because of the shutdown.

Thompson also points to the Alabama Housing Finance Authority as another program having issues. The AHFA has to verify financial information through the IRS before they process mortgages. However, the IRS is furloughed because of the shutdown and that is causing a major holdup.

Thompson believes both programs make up around 20% of all mortgages in the region.     

"A lot of these mortgages already had a 30-day waiting period before the shutdown. Now that waiting period is going to be extended," said Rise Real Estate agent Debbie Epperson. "If you had a lock-in on a rate, your lock-in could expire while you're waiting to get your mortgage."

Financial experts are also warning of major interest rate increases if Congress does not raise the debt ceiling by Oct. 17. 

Copyright 2013 WAFF. All rights reserved.

Powered by Frankly