Shutdown effect is still uncertain
The Title Professionals was forced to put some loan settlements on hold during the government shutdown.
The Fredericksburg-area title insurance agency wasn’t able to verify employment for those seeking a VA Home Loan during that time because the U.S. Department of Veterans Affairs was closed.
Now that the federal government is up and running again, the department is dealing with a backlog that could delay those settlements even longer.
“[Interest] rate locks will expire,” said Melda Bates, marketing director for company’s Stafford County office. “They vary from 15 to 30 days. Hopefully, they’ll get a lower rate.”
The Title Professionals, which also has offices in Fredericksburg and Spotsylvania County, was one of 130 businesses at the Fredericksburg Regional Chamber of Commerce’s first Business Expo. It was held Wednesday at the Fredericksburg Expo & Conference Center.
From stalled loans to canceled hotel reservations, postponed orders to lost jobs, many of the representatives there echoed Bates’ view that it will take time for the full impact of the government shutdown to trickle down.
Among them was Sabine Mullin, general manager of the TownePlace Suites Quantico Stafford at 2772 Jefferson Davis Highway. She said the long-term stay hotel started getting cancellations as soon as the government shut down. They amounted to about 80 percent of her bookings.
“I can’t recover what I lost,” Mullin said. “It will impact our annual revenue.”
She said she reduced her staff’s hours so she didn’t have to let anyone go, but worries about the effect loss will have on others that depend on the federal government employees and contractors for business, such as nearby dry cleaners and restaurants,
Zibibbo 73 Trattoria Italiana & Wine Bar at 2757 Jefferson Davis Highway, for example, had so few customers after the shutdown that it let a dishwasher and busboy go and told one of its three chefs to take some time off, managing partner Nino Pino said the Monday after the shutdown went into effect.
Pam Hicks, senior mortgage banker at the Fidelity Bank Mortgage office in Central Park, said at the expo that the mortgage company scrambled to find alternate ways to verify applicants’ incomes during the government shutdown.
Before, it relied on the Internal Revenue Service to get transcripts of applicant’s W–2 forms and other government entities for additional information because computers have made it so easy to forge documentation, she said.
Hicks said that it’s too early to tell if the shutdown will result in people missing their mortgage payments or decide not to buy a house because they lost jobs or weren’t paid for time they weren’t able to work.
Brooks Grady, who was at the expo to promote Fantasy World Entertainment, said his family-owned business got cancellations for about $70,000 worth of amusement rentals for parties. They include moon bounces, arcade games and a virtual reality charter fishing experience.
“We do a lot of government and military work,” he said. “We had a $50,000 contract at one military base that we thought would be canceled, but they want to reschedule.”
Grady, whose Prince Frederick, Md.-based company supplies parties up and down the East Coast, said that he wasn’t sure if or when that would happen.
“I’d hate to lose a $50,000 party because of the government shutdown,” he said.
Jamie Scully, who manages the brokerage side of Cushman & Wakefield | Thalhimer’s local business, said that clients who were applying for Small Business Administration loans for commercial property saw their applications put on hold because the SBA was closed during the shutdown.
He said that while it’s too early to quantify what the shutdown’s long-term impact will be, economists at a conference he attended recently said that the conflict in Congress that led to the shutdown “is the new normal way of democracy in 2013, and to get used to it and learn how to adapt.”
Cathy Jett: 540/374-5407