Government Shutdown You may be wondering how the U.S. government shutdown that occurred on October 1st will impact the mortgage lending industry. Most processes in the industry will continue un-interrupted. Fannie Mae and Freddie Mac, as well as their regulator, the FHFA, will continue to operate normally. However, certain government related services will be affected, including the following: Tax Transcripts (Form 4506T) At this time the IRS is not issuing Tax Transcripts due to government employee furloughs. Tax Transcripts are still required in order to process mortgage loans, and will therefore cause delays on transactions that did not receive Tax Transcripts prior to the shutdown. FHA The Federal Housing Administration (FHA) will continue to endorse new loans on its Single Family Mortgage Program, but it will not make new commitments in the Multi-Family Program. FHA Connection is expected to be operational and lenders are able to obtain FHA Case Numbers, perform CAIVRS checks, obtain insurance endorsements and pay upfront MIP premiums. Loans with a case file number, approved appraisal, clear CAIVRS may close provided all other standard requirements are met. Potential issues include: • System issues preventing case #s from being obtained • Support staff may not be available to assist with loan level issues • Uncertainty concerning loans submitted for a case number but placed “On Hold” • Uncertainty concerning the ability to obtain FHA Project Approval if project is not FHA approved • Uncertainty concerning the ability to have a case number transferred from another lender VA Loans with an approved appraisal and clear CAIVRS may close (provided all other standard requirements are also met). The VA has issued the following statement: Impact: The VA Home Loan Guaranty Program will continue to operate as normal in the event of a Government shutdown. Lenders and Servicers should continue normal activities which include, but are not limited to, the following: 1. Lenders should continue to submit funding fees through the VA Funding Fee Payment System; 2. Lenders can obtain their Loan Guaranty Certificates; 3. Lenders can continue to order and receive appraisals and issue Notices of Value; 4. Lenders and Veterans can continue to obtain a Certificate of Eligibility online; and 5. Servicers can continue to perform loan modifications, submit claims and receive claim payments, and convey properties to VA. USDA Loans with a USDA Conditional Commitment that does not contain provisional “subject to” language and with clear CAIVRS may close (provided all other standard requirements are also met). Potential issues include: • May not be able to issue new commitments or Loan Note Guarantees • May not operate GUS • Support staff may not be available to assist with loan level issues Social Security Administration Lender will not be able to verify Social Security Numbers through the SSA. FEMA Flood Insurance It is anticipated that most functions will not be affected. However, mapping issues or amendments may be impacted. © 2013 Axiom Financial, LLC. Equal Housing Lender. NMLS #4642. All services rendered by Axiom Financial are to assist in providing mortgage loans.
Posted on: Thu, 03 Oct 2013 00:07:13 +0000