Sep 30, 2013 3:35 PM by Janine Reyes
CORPUS CHRISTI -- As the possibility of a government shutdown looms closer, some who work in the business of home sales are getting concerned. FHA, VA and USDA mortgage loans are how most home deals are closed here in the Coastal Bend and they could see an impact.
Some lenders don't anticipate a problem. FHA and VA loans are not federally funded, but they are federally guaranteed and they say that could cause problems after closing.
Still, others are concerned it could snag those closings.
Until that happens, though, realtors and potential buyers are doing business as usual.
Lorraine Wolff is in the market for a home, and to her, its more than just a house, buying will reunite her family and save them some cash.
"Now we're trying to relocate," Wolff explained, "I live in San Antonio, he lives here, so, we're having to pay double living expenses."
Realtor Shirley Soriano is showing her 9 homes today. Wolff's lender at Navy Federal told he she's not too concerned yet, but if a government shutdown lasts more than a few days, it could have a big impact.
"If seller does not want to extend, we could lose the property," said Soriano, "and that's a lot of money, they lose earnest money, they lose inspection money."
The market is already not beneficial for the buyer. "It is a sellers market, we have people coming in and we have bids on these houses, multiple bids because we don't have enough homes," Soriano said.
Soriano estimates about 80% of her business is VA or FHA and that means if the government shutdown happens for an extended period of time, it could really halt sales here in our area.
"I'm beginning to get very nervous about it because I do a lot of VA's," Sorainao said.
The ripple effects could impact more than just Soriano and Wolf. Sellers waiting to close on another home, even if they aren't VA or FHA, could be held back because of a buyer who is impacted.
Realtors, title companies and lenders could feel the ripple effects.
And take it from Wolff, who's husband already suffered through a furlough in 2011. "Pay did get cut by one week," she explained, it's something could trickle down to the community as a whole.
"It's very frustrating, very worry-some," Wolff said.
Until it happens, though, Soriano and Wolff are moving ahead as planned. "We'll conduct business as normal and hope for the best," Soriano told Wolff as they planned their day of house hunting.
The last furlough did not majorly impact home sales, because the major lenders closed without the government guarantee.
But, since its unknown how long the shut down may last, if it happens this time, it could cause problems.
Another problem with the impending shutdown is loan approvals, since getting those requires an IRS document. That could also cause a backup the market that at least one lender shared concern over today.