Terry Gilliam's new film, "The Zero Theorem" will be familiar to his fans.
Borrowers hoping to get mortgages backed by a government agency will probably see delays, as much of the staff is furloughed due to the government shutdown.
The shutdown comes as the housing market has climbed back from the financial crisis. If the shutdown lasts more than a week, economists predict it will threaten the housing and economic recovery.
JEREMY HOBSON, HOST:
From NPR and WBUR Boston, it's HERE AND NOW. I'm Jeremy Hobson. It's HERE AND NOW.
And if you're looking for a loan to buy a new home right now, you may be waiting awhile. The government shutdown could slow down the approval of mortgages and, potentially, threaten the nation's housing recovery. Marty Schenker of Bloomberg news joins us to discuss. Marty, welcome back.
MARTY SCHENKER: Thank you.
HOBSON: So how is the shutdown affecting the mortgage industry, first of all?
SCHENKER: Well, at this point, it's rather limited. The - it's definitely affecting those mortgages and a quarter of all mortgages that are guaranteed through the Federal Housing Administration or the Department of Agriculture, which actually does rural loans, and those people who are - only have about 10 percent of their staff in and working. So those loans are delayed.
HOBSON: And how many people would be affected by that?
SCHENKER: Well, probably, the number is in the thousands at this point. And, you know, we're only into the fourth day of the shutdown. As it gets longer, the numbers will grow and the affect will get more serious.
HOBSON: Now, I've seen that one of the possible problems is that, sometimes, the Fannie Mae or Freddie Mac or a bank would have to verify someone's income through the IRS. But the IRS doesn't have the staff to do that right now.
SCHENKER: That's right. The friendly folks at the IRS are on furlough, so they won't be able to do income verifications. And that's true also of Social Security information that's sometimes are required. But Freddie and Fannie loans, those organizations are funded by fee, so they are up and operating. So those operations are not particularly affected at the moment.
HOBSON: What might this do to the housing recovery? And I guess, I should ask, first of all, for you to tell us where we are with the housing recovery because, of course, prices have been rising in a lot of places after a steep decline.
SCHENKER: Yeah, absolutely true. The housing prices climbed - have climbed 21 percent since hitting the post-recession low in March of 2012. And - but they're still below where they were in the depths of the downturn. And so this is a really fragile housing recovery. In any sustain shutdown in the government that threatens the economy could, in fact, threaten housing.
HOBSON: And, of course, there is also the October 17th deadline looming for Congress to raise the debt ceiling. What kind of an impact could that have on the housing market...
HOBSON: ...if that - if there were no - if the debt ceiling were not raised and the U.S. were allowed to default?
SCHENKER: Well, you know, housing would just be one of the headaches we have. I mean, basically, all bets are off if there's ever a true default of the United States' government debt. And the catastrophic predictions, really, no one knows exactly what would happen. But I think everybody is pretty unanimous that the affect would be bad and just not in the United States, but worldwide.
HOBSON: And, of course, the thing that I'll be thinking of in the housing front there would be mortgage rates going up. Is that...
SCHENKER: Oh, yeah. Mortgage rates would spurt. People would be laid off. They wouldn't be able to meet their commitments for their mortgages. It would be a - some people project it would be as bad or worse than 2008.
HOBSON: Well, Marty, before we let you go, what's the talk where you are about when the shutdown may end?
SCHENKER: Well, the talk where we are and what most people are banking on is that things will actually get sorted out when it looks darkest. And that's the way Washington seemed to be working these days. And it's one thing to look hopeless that somehow things come together.
HOBSON: Marty Schenker of Bloomberg news, thank you so much.
SCHENKER: You're welcome, Jeremy.
HOBSON: And you know, Robin, if you ever want to find out what's going to go on in Washington - and sometimes, it's very hard to find out what's going to happen in Washington - check on Wall Street. Sometimes, they have...
ROBIN YOUNG, HOST:
HOBSON: ...they have some information that other people tend not to. So maybe Marty is right. We'll be back in a minute. HERE AND NOW. Transcript provided by NPR, Copyright NPR.