How Will The Government Shutdown Impact the Housing Market?

By
Real Estate Broker/Owner with StoneCrest 01704912, Cal Bar 242498

Unless you are a Federal employee most of us have been trying to figure out how the government shutdown is going to affect or impede our daily lives. Being in real estate it is natural to wonder how the shutdown will affect housing and mortgages.

More than 90% of the residential housing market depends on the government or GSEs for underwriting, insurance and funding for new purchase loans. Mortgages issued by Fannie Mae and Freddie Mac will reportedly not be affected as they do not depend on federal appropriations to operate, but rather they are funded by fees from lenders.

Mortgage Delays

It is reported that mortgages will continue to proceed through the usual channels but some delays may be expected. The HUD department shut down yesterday morning and issued the following statement: “Most HUD programs have been temporarily interrupted and most HUD employees have been told they cannot work. We will not be able to check this account or respond to questions during the shutdown.”

The Department of Veterans Affairs will continue its loan guarantee program but cited potential delays and the Department of Agriculture will cease its mortgage financing activity.

How Delays Affect Short Sales

The concern with regard to how the shutdown will affect mortgages is delay. Being in the real estate and particular short sale industry we know this can cause some issues. When a lender issues an approval letter for a short sale it is “go” time to close within the specified time period stated in the letter. Typically lenders only give 30 days to close, sometimes longer and while it is always “possible” to ask for an extension it doesn’t mean it is guaranteed.

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Experienced Sacramento Real Estate Attorney and Sacramento Realtor

Sarah Litchney is a licensed California Attorney, and Sacramento Realtor with StoneCrest Realty. StoneCrest Realty is a full service residential and commercial real estate brokerage.  Click the link to view the StoneCrest Realty blog.

Her practice centers on transactional real estate work. She represents developers, investors, and individual buyers and sellers and their funds in a wide range of matters including acquisitions, dispositions, development, leasing, financing, short sales, general real estate transactions and foreclosures. Her clients range from individuals, investors, corporations, and institutions across all asset classes of real estate, including residential, multi-family and commercial.

Contact Sarah Litchney by calling 916.378.5760.
Attorney, broker at StoneCrest Realty. DRE License # 01704912.
 

The information on this blog is not, nor is it intended to be, legal advice. Please contact us to obtain legal advice pertaining to your situation. The transmission of information by this blog does not create an attorney-client relationship with the law firm’s attorneys. The relationship would require direct contact between you and the firm, and would also require a written attorney/client agreement that confirms that a relationship is established for legal services to be provided. The invitation to contact the firm is not a solicitation to provide professional services, and should not be construed as a statement as to the availability of any attorneys to perform legal services in any jurisdiction in which such attorney is not permitted to practice. None of the communications transmitted via the blog constitutes a confidential communication, or creates an attorney-client relationship. This blog contains information on legal issues, and is not a substitute for legal advice from a qualified attorney licensed in the appropriate jurisdiction. 

Comments (1)

David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct
I guess real estate agents will just have to roll with the punches and keep their cool on this.
Oct 02, 2013 04:20 AM