Gov’t shutdown… what does it mean for lending??

government-shutdownIRS Tax Transcripts: Agency Transactions

The IRS will not issue tax return transcripts during the shutdown.  In the interim we (FSMC) will temporarily suspend this requirement.  However, we will require that the form 4506 T still be executed by the borrower(s) and contained in the file for future use. Once the shutdown has been resolved we must request all transcripts not retrieved during this period.  Additionally we will require a copy of the borrower(s) most recent signed tax return.  As with any exception needed we will address those on a case by case basis.

Jumbo Loans: We will have to follow individual investor guides for this requirement.  As of now most all are still requiring transcripts but we are working on getting relief if the shutdown drags on for a longer period of time.  We will update you as more information is available from our Jumbo investors

Social Security Number Verification:

Direct SSN verification may be not be available during the shutdown.  If this is a requirement the loan can’t close until this process can be completed.

VOE/Verbal VOE for Government Employees:

This condition must still be adhered to in order to approve and close a loan.  Both Agencies take differing stances on this issue but for eligibility across different secondary channels we must still comply with this requirement.

Rural Housing:

We do not do many of these transactions but for informational purposes USDA has ceased all but essential functions therefore all transactions must be delayed until the Govt. is funded.

HUD/FHA:

FHA should not be significantly impacted as long as the shutdown is brief. In their release issued September 27, 2013 HUD indicated:

  • Lenders will be able to obtain an FHA case number from the FHA Connection.
  • Lenders may still utilize our internal processes already established for FHA Connection needs.
  • Caivrs will be available.
  • FHA Total Scorecard will be available.
  • FHA will be able to endorse single family loans during shutdown.
  • FHA will collect the UFMIPs during a shutdown.
  • Lenders are required to submit monthly MIPS to FHA.
  • Limited FHA staff will be available to respond to questions, emails, or other correspondence.
  • FHA staff will not be available to perform Condominium approvals.
  • FHA will not recertify or approve new lenders during the shutdown.

 

VA:

The Department of Veterans Affairs (VA) will continue to operate which means we will be able to continue accepting 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. Remitting funding fees through the Funding Fee Payment System (FFPS) will continue.  There may be a delay in appraisal processing due to temporary staff reductions.

FEMA Flood Insurance:

Based on the information available obtaining a flood cert and applicable insurance should not be an issue at this time.  This could become problem depending on how long the shutdown lasts.  We cannot close any loan that does not contain proper flood information and applicable insurance coverage if required.

 

Thad Wise

Vice President

First Savings Mortgage Corporation

8444 Westpark Drive, The Fourth Floor

McLean, VA 22102

Cell: (703) 350-1733

Office: (703) 564-1758

Direct E-Fax: (703) 564-4760

NMLS ID #340921

twise@firstsavings.com

***Apply on-line at www.thadwise.com***

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