Wednesday, October 2, 2013

GOVERNMENT SHUTDOWN IMPACT – MORTGAGE

Please see below.  The Government Shutdown will have very minimal impact on business at the present time.  We will not require tax transcripts to be obtained on files that would normally require them during the shutdown.    
 
GOVERNMENT SHUTDOWN IMPACT – MORTGAGE
 
As of Midnight September 30, 2013 the United States Government announced that they will shut down for non-essential services until Congress passes a continuing resolution to fund the Government.
 
The following list summarizes the known impacts to government agencies as we know it today:
 
FHA
FHA Connection is expected to be operational and we should be able to obtain case numbers, perform CAIVRS checks, obtain insurance endorsements, and pay upfront MIP premiums.  Loans with a case file number, approved appraisal, clear CAIVRS and FHA approval (if test case), may close if  all other standard requirements are met.
 
Potential delays in service could arise impacting the following areas:
 
·         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 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.”
 
GSE
Freddie Mac and Fannie Mae will continue normal operations without interruption during the temporary federal government shutdown. Freddie Mac and Fannie Mae’s systems and business functions will be open as usual for all selling and servicing functions.
 
 
Additional Information
 
Equifax: IRS Form 4506T & Tax Transcripts/ Verbal Verifications
·         The 4506-T executed form the customer provides will still be required.  However, the actual tax transcript will not be required for closing due to the inability to obtain due to government shut-down.  The underwriters should perform due diligence when reviewing tax returns and immediately report suspected fraud activity
·         Verbal VOEs for Government Employees will not be able to be processed
 
Credit Reporting Agencies
Credit reporting agencies will continue normal operations without interruption. However, they are unable to process any necessary “trade line updates” for Student Loans.
 
Loans to Government Employees
Loans may be closed provided all documentation required for closing or loan purchase has been obtained. However, if any pending documentation cannot be obtained (including a verbal verification of employment), a loan will not be permitted to close or will not be purchased. A verbal verification of employment is an investor requirement that must be satisfied. 
 
For Freddie Mac loans only:
If a loan is made to a government employee and the closing date is during the shutdown period, you do not need to obtain employment verification or re-verification prior to closing if a government office providing the verification is not able to do so as a result of the temporary shutdown. You are also not required to obtain employment verification or re-verification for such loans after the shutdown ends. This exception does not apply to income verification or any other requirements. We ask that you continue to be diligent in your underwriting practices as you remain bound by the representations and warranties as stated in the Guide.   
 
Social Security Administration
Social Security Numbers through the SSA will not be able to be verified.
 
FEMA Flood Insurance
Most functions will not be impacted; however, mapping issues or amendments may be affected.