Long before time expired on a deal that would prevent the government shutdown, millions of federal workers were already aware that some of them may not be asked to go to work come Tuesday morning and many more knew that it may be sometime before they receive their salary again.
Federal employees were last paid on Monday Sept. 30 and will next be paid on the 15th of October, just days before the dreaded debt ceiling is reached. No need to panic just yet?
While it’s true that this shutdown could be resolved in days, it could also take many weeks or months to reach an agreement. In that time there will undoubtedly be a large number of federal employees who could miss payments on their mortgages, credit cards and be unable to meet their direct debit payments.
With no certainty of when they will next be paid, what do federal employees prioritize in their lives? They could pay the mortgage as normal and live as if nothing had happened, but what about the fact that they may not receive any pay on the 15th October? Should they then default on their mortgage so they have enough money to feed their families and send their kids to school?
The International Business Times contacted the top six mortgage lenders in America to discuss what plans they have in place to deal with the influx of missed payments if the issue is not resolved.
Most banks have do not a specific plan in place but have said that anyone experiencing difficulties with paying their mortgage or other financial responsibilities should contact the bank.
A spokesperson from Wells Fargo & Co. (NYSE:WFC) said, on the eve of the shutdown, that: “There are too many unknowns right now to know the full impact if an agreement is not made.”
Fannie and Freddie, despite being owned by the federal government will be unaffected by the shutdown, saying that customers can take advantage of their relief programs. A spokesperson for Fannie said that all customers are responsible for the primary interest on their accounts but that there would be no fee for late payments.
Bank of America Corp. (NYSE:BAC) and Citigroup Inc (NYSE:C) have both said that each customer’s difficulties are different and they should reach out in order to find a solution.
It’s likely that all federal employees will be reimbursed adequately, even those who have been furloughed. Although, given the austerity measures that the government has taken in recent times, there cannot be any guarantees that employees who have not been working will in some way be “made good” on any financial problems they have experienced, in a similar way to the government shutdown of 1995/96.
As things stand, 4.1 million employees will not be paid at all and 80 percent will still be asked to turn up to work. In two weeks the country will not be able to roll over on its debt, and if America defaults on that, it could send shockwaves around the globe.
JPMorgan Chase & Co. (NYSE:JPM) was the only bank that was able to offer any kind of hope to federal employees, specifically saying that if any of their customers experience a salary shortfall assistance is available.
Government Shutdown: Mortgages, Credit Cards, Loans And Debits Will Start To Weigh Heavily On Those Federal Employees Who Are Working For Free If A Solution Is Not Reached
No comments:
Post a Comment