The simple answer is that it won’t. Even though most mortgages are owned and backed by the Federal Gov. Agencies, Fannie Mae and Freddie Mac, the terms and servicing of them are pretty iron clad.
What will be effected though is your paychecks and the overall economy. Many businesses and corporations are reluctant to hire and invest dollars into growth because of the uncertainty lingering here. These expectations are likely to have a negative impact on the stock market as well. Assuming congress isn’t able to come to terms, tax rates will go up immediately, but not by much. The new rate will clip 2 percent from every dollar of wage income, or about $20 a week for someone making the median salary of $50,000 a year.
People will start to feel it fairly quickly in their paychecks,” said Ian Shepherdson, an economist at Pantheon Macroeconomic Advisers. ”I don’t think the economy will fall apart completely (in the short term). But we’ve seen already that business confidence is weakening and consumer confidence is weakening. So the uncertainty is a problem.”
My Take – “It doesn’t appear to be as damaging as the media would have you believe.”