What Impact Will The Government Shutdown Have On The Mortgage Industry.

Reblogger Praful Thakkar
Real Estate Agent with LAER Realty Partners

We were there, just a few days back.

A re-post on this topic from the expert in this field, George Souto.

What Impact Will The Government

Shutdown Have On The Mortgage Industry.

Original content by George Souto NMLS #65149

What Impact Will The Government Shutdown Have On The Mortgage Industry.  There is a lot of uncertainty of what will be the impact of the Government Shutdown on government services, and related business.  There is even more uncertainty about how each Government Agency will be impacted as the Shutdown progresses from day-to-day, week-to-week, and may  even extend to month-to-month.  The one thing we do know is employees performing the below sevices are exempt:

  • Emergency Services, which involve the protection of human life or property.
  • Performing activities considered to minimal to suspend agency operations.
  • Work which the Office of Management & Budget (OMB) determines should be "excepted" by them, or Heads of Agencies.
  • Activities which are considered essential to preserving the necessary components of the U.S. Money & Banking System including:
    • Borrowing, and
    • Matters involving the collecting of taxes by the Treasury.

The monkey wrench in this whole Shutdown is individual Agencies make their own decisions on what they consider essential services or not.  So exactly when, what, and who will be impacted by the Government Shutdown is really vague, especially What Impact Will The Government Shutdown Have On The Mortgage Industry.

We are members of the Mortgage Bankers Association (MBA).  They have been on top of what is going on in Washington, and the impact the Shutdown is expected to have on the Mortgage Industry.  Below is the information the MBA has been able to gather from HUD/FHA, and VA.  Below is the information the MBA provided to us:

I. HUD/FHA:

"The Department of Housing and Urban Development’s (HUD) operations, specifically the Federal Housing Administration (FHA), should not be significantly impacted as long as the shutdown is brief. In a document issued September 27, 2013 HUD indicated:

  • FHA will be able to endorse single family loans during the shutdown, however, only a limited number of FHA staff will be available to underwrite and approve new loans so the process may take longer.
  • Most loss mitigation for homeowners facing foreclosure (including FHA loan modifications, FHA-HAMP, etc.) will continue.
  • Limited FHA staff will be available to respond to questions, emails or other correspondence.
  • Lenders will be able to obtain an FHA case number from the FHA Connection.
  • If FHA runs out of commitment authority during a shutdown, then lenders’ Lender Insurance (LI) approval will be temporarily suspended.
  • CAIVRS will be available to determine if a borrower has a delinquent federal debt.
  • FHA Total Scorecard will be available.
  • If a lender submits loans for approval if the lender is in pre-closing, FHA staff will not be available to underwrite and approve loans.
  • FHA will collect the Upfront Mortgage Insurance Premiums (UFMIPs) during a shutdown.
  • Lenders are required to submit monthly MIPs to FHA during a government shutdown.
  • Lenders can file a claim and convey a property. The properties will be assigned to an Asset Manager and listed for sale. Claims will be paid.
  • FHA will not recertify any lenders during the government shutdown.
  • FHA will not approve any lender applications during the government shutdown.
  • FHA will not perform any post technical endorsement or Quality Assurance Reviews during a government shutdown.
  • The Office of Housing will continue to work on planned sales of defaulted notes, as required for the orderly termination of HUD’s fiduciary insurance and servicing obligations.

II. VA:

The Department of Veterans Affairs (VA) will continue to operate if there is a government shutdown, which means lenders will be able to continue originating VA-guaranteed loans. Both lenders and borrowers will be able to obtain their Certificate of Eligibility online (webLGY for lenders, and eBenefits for Veterans), and they will still be able to submit applications and follow up on COEs that require more research with the Atlanta Eligibility Center. Lenders can and should continue to remit funding fees through the Funding Fee Payment System (FFPS).

In addition, servicers will still be able to perform Loss Mitigation on VA-guaranteed loans and VALERI will still be active. Servicers should continue to report all required actions in that system. Lastly, servicers will still be able to submit claims for guarantee, be paid, and convey properties to VA.

III. Rural Housing:

USDA has not issued guidelines yet, but indications are that they may be similar to those in the 2011 contingency plans issued by OMB. Under this plan Rural Development would cease all but essential functions and no new loans or guarantees will be made."

As we get more updates on What Impact The Government Shutdown Will Have On The Mortgage Industry, or anticipated future ramifications I will post about them.

 

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, # Chester, #Deep River, &  and Essex.  George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

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Rainmaker
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Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Praful. A government shutdown is a real joke the politicians play on uninformed people while they continue to receive their benefits and paycheck. Only the low level government employees suffer and then vote for these idiots. Enjoy your day!

Jan 25, 2018 04:53 AM #1
Rainmaker
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William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

I don't think the impact will be all that much in the short run despite what the media is spouting about

Jan 25, 2018 08:00 AM #2
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Praful thank you for re-blogging my blog from the previous shut down.  I should have thought about re-posting it again.

Jan 25, 2018 02:46 PM #3
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