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How Will The Government Shutdown Affect Phoenix Home Sales?

By
Real Estate Agent with United Real Estate SA542701000

The following was part of an email I received from one of my most trusted Mortgage Bankers on Monday evening.


Contingency Planning for Government Shutdown

"With the possibility of federal agencies having their functions curtailed over the lack of a budget agreement in Washington, D.C., beginning at midnight, the Executive Team expects the following mandates will have an effect on our processes:

  • The IRS has indicated that it will not process any forms, including issuance of tax return transcripts (Form 4506T)
  • Lenders may not be able to continue to verify Social Security numbers through SSA Limited FHA staff will be available to respond to questions, emails or other correspondence.
  • USA Rural Development would cease all but essential functions and no new loans or guarantees will be made. It is also likely that GUS, the USDA Automated Underwriting Engine, will be unavailable.

Please review the attachment from the Mortgage Bankers Association that will give you a more in-depth analysis of the budget impasse." 


No Tax Return Transcripts and the inability to verify Social Security numbers will definitely put a kink in the lending process, but beyond the effects listed above, how will the government shutdown affect Phoenix home sales? I spoke with several mortgage consultants most of whom I've worked with for many years.

All of them had varying amounts of concern but none of them were willing to make any predictions that I could post here, although one offered the following: "Well, it's pretty safe to assume that transactions aren't going to become easier or faster and you should probably get out in front of that reality with your clients". I have, I'm working with several buyers and  two sellers preparing to put homes on the market and I have already prepared them for the possibility that transactions will take longer to close and more effort to get there.

The truth is no one really knows how much of an impact our local real estate market will feel. The scariest part of the shutdown is that we're not dealing with market forces but the various political agendas of a group of people, (congress), who have been as unproductive as any group I can remember.

When I think of the possible damage that could happen to our fragile economy and the potential fallout for people trying to buy or sell a home I'm reminded of a quote by Will Rogers - "This country has come to feel the same when Congress is in session as when the baby gets hold of a hammer."

Let's hope the baby doesn't do too much damage.

 

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Posted by

Nancy Laswick United Real Estate Scottsdale

       
           

Comments (7)

Juli Vosmik
Dominion Fine Properties - Scottsdale, AZ
Scottsdale/Cave Creek, AZ real estate 480-710-0739

Nancy, not being able  to get a 4506T IS really important in the lending process. Hopefully,  the lenders all thought of this possibility and got all of their requests in early.  

Oct 02, 2013 12:42 PM
Nancy Laswick
United Real Estate - Phoenix, AZ
Your REALTOR® For The Valley Of The Sun

Juli, absolutely... any lender other than private lenders will be wanting a 4506T or there won't be a loan.

Oct 02, 2013 01:12 PM
MichelleCherie Carr Crowe .Just Call. 408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Hopefully someone will take the hammer away from the baby and make it play nice soon!

Oct 02, 2013 02:23 PM
Nancy Laswick
United Real Estate - Phoenix, AZ
Your REALTOR® For The Valley Of The Sun

Amen Michelle

Oct 02, 2013 02:38 PM
Sharon Lord
Maracay Homes - Peoria, AZ
New Home Advisor

UGH...just what we need - another (potential) market stall...!  Hopefully Congress gets their act together, drops the posturing, and considers what's best for the COUNTRY, not just individual adjendas!

Oct 05, 2013 04:49 AM
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

Interesting how the "shut down" is shaking out. One source indicates over 80% of government operations are affected by the shut down. Funny how one department has manpower to close open parks and another cannot process requests for tax records.

Oct 07, 2013 11:39 PM
Nancy Laswick
United Real Estate - Phoenix, AZ
Your REALTOR® For The Valley Of The Sun

Sharon, each day the government is "closed" and unable to deal with the debt ceiling, which is the real elephant in the corner, we move closer and closer to defaulting on our debt. If that were to happen it would deal a greater blow to the future of our country than any terrorist attack. Those who hate us and seek to destroy us must very pleased to watch the news each night.

Wayne, evidently closing open area parks was a priority. I was very amused to watch the video clip of the WWII veterans entering the WWII monument area. Did they really think a couple of ropes, tape, orange cones or signs, etc. were going to keep these veterans out? How silly. And can you imagine the lost political captial if one or more of them were arrested, detained or physically restrained? Talk about something "blowing up of YouTube".

 

Oct 08, 2013 05:06 AM