By Mike Murray-Coldwell Banker Residential Brokerage- September 27,2013
By now you’ve probably read all there is to read about the looming government shutdown next week. But here are few ways the possible government shutdown on October 1 may directly affect our area housing market that you may not have considered:
1 FHA Connection/Case Number Assignment – Many believe that the FHA Website known as FHA Connection will cease to issue FHA Case Numbers which are required on every FHA Insured purchase or refinance. FHA loans were used in 25% of the purchases in Anne Arundel County last year. Could the same be true for VA Loans?
2 Flood Insurance Rate Increases – Owners of high risk low lying properties face up to 25% increase in their flood insurance premiums starting on 10/1. But the heaviest hit will be when homes are sold. The new owner will be forced to pay the “Full Risk Rate” that has been reported as being ‘Exponentially Higher’ than their current costs…and guess what…no one can figure that number out yet. Congress is trying to find room in spending budget to offset these increases.
3 Homebuyer Furlough – what if the person buying your home is a ‘Non-Essential Employee’ of the Federal Government. Mortgage companies will not send a loan to closing with a furloughed borrower whose future income or employment status is unknown.
4 IRS – Every mortgage loan these days requires the processing of a 4506T. It allows the IRS to send a copy of your transcripts to the lender for review. Loans will not close without it…and if the IRS is closed or has a diminished work staff its likely these could be delayed indefinitely.
5 Social Security Number Verification – Same as the above point. The government is needed to verify your SSN for your lender.
We’ve seen this before and will eventually get through it – hopefully as early as this Monday. Please contact Mike Murray (240)508-7246 mike@TheMurrayHomeTeam.com with any questions.