More information on how the government shutdown affects real estate

How will this continuing governmental shutdown affect your business?  What things should you be aware of?

1)  It's not just federal government workers that are affected.

   Even though almost 350,000 DOD (Department of Defense) civilian workers have now been identified as essential and been brought back to work, there are lots of private sector companies that have had to furlough workers because of the government shutdown - Lockheed Martin was set to furlough 3,000 workers today for example.

 

2) Even if your federal government employed consumer is working, it might still be an issue for moving forward with their transaction.

   Even though your homebuyer may be working, many of the resources used to verify employment data are closed, meaning that the lender may not be able to move forward with the loan.

 

3) Lenders are working on workarounds for some of the problems that the shutdown has created.

   Many lenders are working on workarounds for getting loans closed even though they can't follow the normal procedures.  An example is that some lenders are closing some loans without an executed form 4506-T verifying borrower transcripts.  Ask your lender if they are able to do this, if not, be patient with them as it is not your loan officer's fault.  Most lenders are working on temporary solutions, so even if they are not doing it now, they may be doing it soon.

 

4) USDA offices are closed, but FHA and VA loans are still possible.

   There are lots of nuances that could cause a delay in an FHA or VA file (such as social security number verification or employment verification), but the websites for both departments are still functional (unlike many government sites) and the VA Benefits Administration has 7,252 of their 21,237 employees still working and still trying to facilitate VA support.

5) The next big mover on the horizon is the required raising of the debt ceiling.

   With the date of October 17th having been given as the deadline date for the debt ceiling debate, expect almost two weeks of political posturing and fighting before we see resolution.