IRS Shutdown Impacting Third-Party Originators

The bottleneck over getting Internal Revenue Service transcripts is beginning to hurt correspondent and wholesale lenders, according to sources.

Major banks are continuing to originate Fannie Mae and Freddie Mac loans through their retail networks. Their loan officers can close a loan without an IRS transcript. The loan officer just has to make sure the borrower has signed the IRS form 4506-T so it can be processed when the government shutdown comes to an end and the IRS starts processing the 4506-T forms gains.

But some of these large banks are not waiving the IRS transcript requirement for third-party originators.

Sources indicate that Wells Fargo will not accept loans without an IRS transcript from its correspondent lenders. Wells Fargo could not be reached for comment.