• Home
    • Blog
    • Is the Government shutdown affecting Real Estate?

    Is the Government shutdown affecting Real Estate?

    In a word…Yes.

    FSBO-FrustrationLenders usually verify income for buyers at 2 separate occasions…At the initial application phase to check qualification and at the end to verify the applicant still has their job!  The 4506 is the form that a lender uses to verify income (tax return statements) and with the shutdown that is not happening!  Closings are being delayed and in some cases cancelled!  Short sales are especially vulnerable since the approvals are tied to BPO reports that speak to home value and those reports expire!  That means new reports need to be competed and reviewed and submitted to the investors who decide such things at the banks.

    The 4506 reviews are also required with conventional loans as well.  Truth is many lenders have “workarounds” in place since a few days after the shutdown but it’s still tenuous at best out there!

    Inventories are still at near record lows and the US government is making it harder to buy!?  This sounds like a recipe for price escalation but it’s not…It’s a recipe for housing STAGNATION!

    Trackback from your site.

    Leave a Reply