Perfect Timing for a Realtor's Open(casket) House

Welcome to the highest priced residence in Belleville, NJ. The historic converted 18th century mansion had been on the market for over six months at $1,650,000 with no takers. So it was time, last week, for the listing agent to pull out all the stops with a catered open house to alert local brokers to news of a huge price drop to $999,000. The chief selling point was the owner's amazingly luxurious residence on the two upper floors of the historic mansion that had been converted to "mixed use" on the ground floor.

"9000 square ft mixed use building with additional 2 story structure (10 car garage) and parking in rear. Ground floor appropriate for commercial use. 2nd floor is a residential renaissance masterpiece with work by Italian and French master craftsmen. Also includes Freight elevator, finished basement."

Until we arrived at the downtown Belleville address, most the invited brokers had no idea what the current commercial use was.  At the time I opened their creaky front door, all 3 sales persons were occupied on the upper floors, leaving me several creepy minutes to wander undisturbed through the ground floor establishment accompanied only by the funereal piped in mood music. In my mind, I channelled The Adams Family theme.

Flow Chart of The Morgtage Process

Despite the hurdles that many buyers face in getting a mortgage approved, today's home buyers have more mortgage financing options than at any time in the last 5 years. With so much choice and brand-new rules, it can be tough to know which loan is best. Thanks to Dan Green's Daily Mortgage Report:

Check local mortgage loan limits at The Mortgage Reports.

The Shutdown's After Effects on Housing Market

The government closure that finally ended late last week was beginning to put a noticeable  crimp in the recovering housing market.

Housing lenders rely on a variety of government data, such as verification of borrowers' income, which are unavailable with the partial closure of the Internal Revenue Service and other agencies. The mortgage industry has found creative ways to work around the shutdown. Banks are getting data from other sources. Sometimes they're simply taking the risk of making loans without some information.

Nevertheless, the shutdown is delaying loans around the country. And some experts warn that home lending could have been more severely disrupted if the political stalemate in Washington persisted much longer.

The chart below, showing rate projections for the 2014, was prepared just before the shutdown.

The Price of Waiting to Buy

The Government Shutdown and its Effect on Real Estate

Congress has failed to approve a Continuing Resolution (CR) providing funding for most government operations. Therefore, spending authority for most of the government expired at midnight on Sept. 30, 2013. Until legislation providing for funding is signed into law, many offices and programs of the federal government are now shut down.

This means many, but not all, government programs, including some that impact federal housing and mortgage programs, have been suspended or slowed due to the lapse in government funding. The Office of Management and Budget (OMB) requires each agency to have contingency plans in place. The information below is based on a National Association of Realtors" (NAR) staff review of agency contingency plans for the current shutdown and past experience with previous shutdowns and near-shutdowns.

Internal Revenue Service The IRS is closed and has suspended the processing of all forms, including tax return transcripts (Form 4506T). These transcripts are required for many kinds of loans, including FHA and VA, so delays can be expected if the shutdown is protracted.

Federal Housing Administration 
HUD’s Contingency Plan states that FHA will endorse new loans in the Single Family Mortgage Loan Program, but it will not make new commitments in the Multi-family Program during the shutdown. FHA will maintain operational activities including paying claims and collecting premiums. Management & Marketing (M&M) Contractors managing the REO portfolio can continue to operate. You can expect some delays with FHA processing. inistration The Social Security Administration is closed and has suspended most customer service functions. According to the SSA Contingency Plan, verifying Social Security numbers through the Consent Based SSN Verification Service will also be suspended during the shutdown, a further complication for mortgage processing.