Government shutdown has lasting effect on real estate market - News, Weather & Sports

Government shutdown has lasting effect on real estate market

Denise Wright Denise Wright
Jeff Ratanpool Jeff Ratanpool

LOUISVILLE, KY (WAVE) - The end of the shutdown means parts of the country will begin moving again, including the mortgage industry. Government-backed lending was suspended during the shutdown. Mortgage financing hinges on a lot of transactions that could not be processed for over two weeks. As a result, the shutdown postponed or derailed home purchases for many families.

One Jeffersonville, Indiana couple said the shutdown caused them to purchase a different house with higher interest rates and a bigger down payment because of the shutdown. They wanted to receive a USDA Rural Housing Loan. During the shutdown, however, the USDA was not processing any loans. Consequently, Denise Wright and her husband opted for a home in a non-rural part of Clark County and had to put down $5,000.

"It would've been nice to spend the money that we had as a down payment for different things inside the house we could have used, different furniture, whatever," said Wright.

Wright said she is a Democrat and her husband is a Republican, but during this whole process they both agreed they were unhappy with politicians in Washington. That position is shared across the nation.

Jeff Ratanapool, president of Century Mortgage, said the shutdown was a nuisance to the entire housing market. He says some in the mortgage industry were forced to find creative ways to work around the shutdown.

"We have to verify that Social Security number," said Ratanapool. "In addition we have to verify that the tax returns that the borrowers gave to us for our loan decision were what they actually filed with the IRS."

Ratanapool said agents had people bring in Social Security cards and sign forms stating that information submitted was truthful and accurate.

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