Seattle, Washington (PRWEB) October 18, 2013
The pillars of the real estate industry, the FHA, Fannie Mae and Freddie Mac and even the IRS were close to a non-functional state due to Congress's actions. Most residential loans need a verification of income. During the government shutdown lenders were no longer able to rely on the IRS to produce these. Without income verification, lenders cannot fund new home loans. The FHA guarantees about one third of all mortgage loans. It was operating with a 90% staff reduction. Many lenders rely on Fannie Mae and Freddie Mac to buy their loans. A high percentage of loans in America rely on these lenders as well. Because they are government backed mortgage companies the shutdown would’ve meant a stop to buying loans.
Brokers at Skyline Properties, Washington's largest independent real estate company, had started calling clients to inform them their loans would not be funded on time. Skyline closes about 260 sales each month and expected that number to begin to fall dramatically and immediately if the government shutdown had not ended. Scott Hotes, managing broker of the Northgate office, opened an email for his client last week, which read, "Because of the government shutdown there is no telling when your loan will be approved. We cannot move forward until the government processes resume and they approve the amount requested."
Real Estate brokers and lenders all over America were making these calls to their clients. The domino effects of this would have been rippling through the economy. Builders, lenders, real estate brokerages, escrow companies, title companies are just the first that faced laying off workers or temporarily shutting down.
According to Ron Hennig, Skyline's owner, “Congressional idiocy must end immediately. The real estate industry is a huge driver of our economic recovery and it is teetering on disaster. They have caused great damage already and must step back from the abyss. The deal on Wednesday went through but will it bring us to the same situation in January?”
About Skyline Properties Inc.
Skyline Properties is the largest independent real estate company in the Northwest. They have approximately 650 brokers who work out of 5 Puget Sound locations. Skyline is involved in 1 in 10 transactions in the Greater Seattle area and this December will be celebrating 25 years in business.