What’s one way to sabotage the already struggling housing market recovery that millions of Americans desperately need? Why, a government shutdown, of course.
As we head into the second week of the government shutdown, little progress has been made beyond pointless offers to fund specific programs with piecemeal bills. Realistically, this strategy amounts to political posturing and saving face for a group of lawmakers that continue to obstruct progress—with it, we are no closer to finding a solution.
Unfortunately, many home buyers waiting for approvals for home loans will be out of luck. As the Washington Post explains, “Without paperwork from the Internal Revenue Service, the Social Security Administration and in many cases the Federal Housing Administration, banks, and other mortgage lenders will be less willing to make loans, if they can make them at all.”
The Internal Revenue Service may not be everybody’s favorite government agency, but it certainly has its uses for borrowers who need their income or tax returns verified in order to apply for mortgages. Likewise, it will be difficult for banks to verify identities of borrowers while the Social Security Administration has its doors closed. These agencies need workers in order to prevent delays in processing and closing loans. However, they are painfully understaffed. According to Forbes, the U.S. Department of Housing and Urban Development, which runs the Federal Housing Administration, only had 337 out of 8,709 managers and staffers on the job last week.
The longer that this shutdown lasts, the more likely it is to affect the housing market. For Latinos who were disproportionately hit by the foreclosure crisis and already own homes at lower rates than their White counterparts, weakening an already fragile market will make it even more difficult to purchase homes. This comes on top of budget cuts brought about by sequestration that have gutted critical programs across the country that offer borrowers housing counseling and rental assistance.
Homeownership remains the cornerstone for stabilizing and rebuilding the middle class. But some in Congress seem determined to make it nearly impossible for struggling communities to recover. Our elected officials are playing a dangerous game with the housing market that will inevitably impact the economy as a whole. It’s time to stop playing games and start governing responsibly.
There are no winners in a country where families can’t afford to put a roof over their head.