Column: How the federal shutdown can still hurt homebuyers

Uncle Sam may have flipped the sign to “open again for business,” but if you applied for a home or business loan before the shutdown, your loan’s journey to closure may be longer than the standoff on Capitol Hill.

Here are four potential plugs in the pipeline — and what you can do to make sure your loan doesn’t get stuck in the backlog.

USDA loans

No it is not a steak dinner.

All loans were on hold, but the reopening doesn’t bring those loans fully back to life. In many cases they face delays of 30 days or more. This will cause interest rate locks to expire, and earnest money contracts to become invalid.

Once again, the poor borrowers get the short straw on shutdown.

Three scenarios could play out: Borrowers risk losing their homes due to the lack of homes for sale, which encourages the seller to either ask the borrower for more money upfront, or put the home back on the market at a steeper price. Additionally, the traditional loan file is time sensitive, and may now require borrowers to submit more documentation. Increased rates may also spike the overall cost for the loan.

Solution: There’s sure to be a huge backlog, but one way to help move your file faster, is to immediately update all of your time sensitive documentation. When the underwriter finally gets to your file, you’ll be prepared and ready to move forward, rather than be sent back to the end of the line to update your information.

Government employees

Many employees were working during the shutdown, but have no current paystubs to verify income or employment. By law, lenders need that information to close the loan.

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About PortlandHouseListings.com - Tom Ramsey, local Realtor

Local Portland Realtor with 10 years experience specializing in residential sales and investment property. Tom Ramsey Oregon Real Estate Principal Broker John L Scott Real Estate Phone: 503-481-0501 tomramsey1@gmail.com www.PortlandHouseListings.com
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