Will the gov’t shutdown affect the mortgage process?

Hey guys, thanks for reading, I know that many of you will have questions and concerns about how this affects or can potential affect the families that we are currently helping. So here is some down and dirty info and if you have any specific questions or concerns, even with a family that is not working with me, please give me a call.

We all know by now that congress’ failure to pass a spending plan this past weekend resulted in a government shutdown. While essential government services remain in operation, many government agencies are unable to open or operating in a limited manner this morning. The good news is that Fannie Mae, Freddie Mac and Ginnie Mae are operating as normal, and capital markets remain open and functioning on regular schedules. Delays in a resolution, however, could cause disruptions at the IRS and USDA and that is where it could be an issue for us.

The Senate is scheduled to vote at noon today on whether to end the shutdown and reopen the government for three weeks. If that vote fails, getting our families approved and clear to close may slow because the IRS may postpone borrower income verifications. (the processing of the beloved 4506T forms) Home loan processing from the USDA (rural home loans) may also come to a halt. The biggest issue or concern that I see, even beyond having a delayed settlement is that our economy loses approximately $1billion a day during a shutdown and we have already lost upwards of $3 billion. What good could we have done for our country and our citizens with that money?

On the positive side (since we all should think WisGAT-What is Good About This) traditionally the market has seen rate improvements after a shutdown. (5 times since 1987) It may be a slim silver lining but a silver lining nonetheless.