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I am wondering what would be the short term impact on home prices as well as mortgage interest rates due to Budget Crisis/Government Shutdown.
I think this is pretty much the same sort of political theatre that happened during the Clinton years. I don't think it will end up having much of any long-term effect whatsoever, just annoying short-term disruptions. See Bill McBride on this.
I am planning to purchase a home in the near future.
I am wondering what would be the short term impact on home prices as well as mortgage interest rates due to Budget Crisis/Government Shutdown.
Would there be a possibility for the home prices / interest rates to go down.
I am not sure if it would make sense to wait a bit or go head with full steam
Please advice.
Regards!
Just be sure you are going to be able to stay put. If you need to be mobile, it's not the same housing market as the old days. You can't be in a house a few years and expect to walk away at closing without crying.
My only reaction is irritation that the politicians do so much manipulating and even more irritation that the voters keep buying it. Over and over, the same thing. There appears to be no learning curve with the voters, and no memory that is detectible.
In my opinion, the biggest impact will be on short sales and foreclosures with FHA/VA financing and Fannie Mae/Freddie Mac owned homes. However, I don't think it will be a sustained slowdown, only short term.
Unfortunately, we will see what happens and can only offer opinions. I broke my crystal ball and my "Magic 8 Ball" stopped working.
The Veterans Administration sent out a circular on Monday indicating that they are business as usual in event of a shutdown.
Loans can be taken, appraisals ordered, notices of value given and most importantly lenders can receive their VA eligibility funding certificates from the VA.
FHA is also still in business as usual.
However, really big problem is in the link. Lenders typically verify both tax returns and Social Security numbers. If IRS and Social Security offices are closed, this cannot be done. Thus, mortgage industry may be at full stop in spite of other agencies willing to continue on as usual.
USDA commitments ceased this Tuesday morning and any USDA loan in the system without a commitment issued will not be able to close.
The IRS has suspended all 4506T processing. This will impact self-employed borrowers. All wage earners will use an alternate method.
FHA/VA will continue to insure and guarantee loan files, however any manual request (example: requesting a case number be cancelled to allow a new case to be processed) will not be processed. Currently both the VA Portal and FHA Connection are up and running so we can order case numbers, however if either system goes down it may take an extended period to get back on line.
For existing and new customers who are government employees, verifications of employment may be delayed or impossible to obtain during the shutdown. Those government employees who are furloughed will not be able to close on a mortgage until the government is up and running again
From a lender: "Loans purchased by FNMA or Freddie Mac certainly will be affected as a 4506T to verify borrowers IRS transcripts are a mandatory part of the undewriting process. Since the IRS is mostly shutdown, the 4506Ts cannot be processed. Loans without verification of IRS transcripts cannot be sold to FNMA or Freddie, so those loans wont’ close. "
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