Mortgage Market News and Commentary Blog

I started my day Friday with a heavy heart. A reminder not to take things too seriously was sent to me by one of my closest friends via tweet that hit spot:

    “Do I always get to pick the movie we watch? No. I compromise and let her pick a chick flick sometimes. US Congress: Grow up.”

The population that would have been affected the most would have been our armed forces. The very same people that are abroad taking bullets for our country. How selfish can one be to not care about the on-time payment for our men and women that serve our country? Putting them in a position of financial strain?  So now spouses at home not only have to sit helpless worrying about the dangers of combat, but also when the next paycheck will arrive?

Additionally, most consumers did not realize until now the darkness of the inane disagreements of the people we have voted into high offices. Self-consumed with who gets what, a truly childish obsession that we now know boils down to a mere $2 billion and a lame-duck attempt to blame the entire stop gap on-wait for it- abortion, we are hostages in the very week we are desperately rushing to get our taxes in on time.

As relates to the already black and blue residential lending industry, a  government lock-down would have essentially halted every major transaction in its tracks, especially those requiring ANY kind of financing. These days, most underwriting guidelines call for a disclosure request for IRS transcripts of the borrowers’ tax returns. Without this form, the lenders have no way of ensuring accuracy of the tax returns submitted with each loan application. With the IRS shutting down, no loan would have funded. Yet another blow to the consumer.

To make matters worse, we all know by now that FHA represents a very large source of the purchase funds for owner occupied homes by first-time home buyers. With a government lock down, HUD would have shut down its offices making it impossible for these transactions to be completed. To add another layer of frustration, the lenders involved in short sales and foreclosed property sales have the least patience when it comes to extensions. Should you not be able to close a transaction by the date that the lien holder sets for you, they will not hesitate to move on to the next buyer. At this point consumers would have lost millions in appraisal fees and, in some cases, application fees demanded by the big lenders like Bank of America and the like.

On the lowest, but still personal level, I was unreasonably punished. Before the 11th hour agreement was reached, the travel.gov declared the cancellation of passport day on April, 9th. The one day of the year when you do not have to wait 4 weeks for an appointment to get your passport renewed in person. The wrath of my wife that I fielded after the announcement that although the lock-down was avoided but passport day was still cancelled,was worse than any fit I’ve seen her in in these many years (we have not been on vacation since our honeymoon, and God help the soul that halts her progress.)  Not to mention missionaries on their way to infinite humanitarian causes, and the micro-effect on that portion of the economy.  In fact, this highlights the reality that every misstep our government takes continues to arrest economic recovery and growth.

When I think about what is going on globally in Libya, Egypt, Tunisia etc., and the power of social media, did the Obama administration dodge a nationwide revolt? Thankfully, for the time being we will not know the answer to that one. At least not in the immediate future.