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Partial government shutdown has homebuyers, sellers stuck in limbo

Posted October 8, 2013

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— For travel agent Susan Claypoole, trips are both business and pleasure.

"I like to travel, so every time I plan a trip, it's to somewhere I'd like to go," she said.

Although Claypoole looks forward to each new adventure, she also loves having a place to call home. Right now, though, that's a problem.

"I'm actually staying with my grown son," she said.

She has her heart set on a house of her own, but the purchase is in limbo because of the partial government shutdown.

"My loan has been sent to the USDA, and now it's stuck there," Claypoole said.

Every year, the U.S. Department of Agriculture doles out more than $100,000 in rural home loans. Right now, that business has stopped.

Charles Puryear, of National Fidelity Mortgage, says the Internal Revenue Service has also become a problem for new mortgages during the government shutdown.

"We have to order tax transcripts. We have to verify the buyers' wages through the IRS," Puryear said. "With the inability to do that, we actually can't move their loan along either."

Fannie Mae and Freddie Mac are now allowing lenders to issue loans even without IRS confirmation.

Another issue that's come up is the verification of federal workers. Mortgage lenders are having a difficult time verifying employment for those workers simply because many of their places of employment are closed.

But there may be one bright spot in all the shutdown fallout.

"Rates, from what we've seen, have gone down just a little bit," Puryear said. "I would say it's not been anything major."

As the shutdown enters its second week, Claypoole is sure she'll miss her expected closing date of Oct. 20 by at least a month.

"I'd like to move on and start my life in my new home," she said.

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  • oleguy Oct 10, 2013

    OUR Gubment,has grown way past its being, Time to cut it back, Its time the 51 % take control, before we become the 49%, at which point all is lost, These few in Washington are trying to stop the Take over,, Take heed,, Hitler already tried this, he failed, Prezz O has the advantage, he is very close to doing what Hitler could not

  • flyguync Oct 9, 2013

    "Thank republicans for this and the coming economic disasters.

    They believe destroying America under this President is worth any and all collateral damage they cause."

    When will the president get a clue and realize he isn't the king? What happened to his 2008 campaigning around reaching across the aisle?

  • klink Oct 9, 2013

    The fact that a person can't complete a home purchase because the federal government is shut down is a perfect illustration of how over-reaching the federal government has become.

  • teleman60 Oct 9, 2013

    Thank republicans for this and the coming economic disasters.

    They believe destroying America under this President is worth any and all collateral damage they cause.

  • rlwieland Oct 9, 2013

    All this, but the Gym Employees in congress have never stopped coming to work becuase Congress felt their gym had to stay open. If all this and your insurance rates not doubling like mine did today when I finalley opened my letter from blue cross doesn't have you outraged you just don't care. There will be no incumbent I vote for in federal elections. They will not give us term limits then this is what we get so we have to vote them out.

  • whatelseisnew Oct 9, 2013

    The government should not be lending money NOR should they be guaranteeing loans for anyone or anything. See the problem is what they are using as their collateral are your future earnings, thus turning you into a slave. This lady should approach private lenders. As to the lender affirming income, they can ask for a couple years of tax returns and some current pay stubs.

    "recent homebuyer was pre-approved but had to get insurance through ACA and now because of the higher payments does not qualify for the home they had a contract on."

    Doubtful a lender can take ACA premiums into account, however, it is entirely possible the ACA premium made it so this person can no longer meet the mortgage payments and pay the much higher insurance premiums. I do not have ANY debt and the reality is, I can not pay for health insurance for my spouse next year. The cheapest quote I have found so far is very very costly.

  • dh1964 Oct 9, 2013

    " recent homebuyer was pre-approved but had to get insurance through ACA and now because of the higher payments does not qualify for the home they had a contract on."

    Baloney.

  • dh1964 Oct 9, 2013

    "Every year, the U.S. Department of Agriculture doles out more than $100,000 in rural home loans."

    More than $100,000? Perhaps we've lost a few zeroes in this figure? Or perhaps you mean that the USDA makes more than 100,000 home loans each year (the actual figure is about 130,000).

  • LKG-Lover Oct 9, 2013

    The government is impacting current sales through the ACA. A recent homebuyer was pre-approved but had to get insurance through ACA and now because of the higher payments does not qualify for the home they had a contract on. More government = less freedom.

  • aspenstreet1717 Oct 9, 2013

    The government should have no involvement in mortgages.