There is loads of uncertainty on what the impact of the Government Shutdown will be on government services, and related business.The uncertainty extends to how each Government Agency will be impacted as the Shutdown progresses from each day, week,
and maybe even month.
One thing we do know is employees performing the below services 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.
There is a monkey wrench in this situation and that is individual Agencies make their own decisions on what they consider essential services.
So exactly when, what, and who will be impacted by the Government Shutdown is really vague.
Potential Government Shutdown and Programs Effected
- FHA – Will continue insuring loans in Lender Insurance & FHA Connection will be operating. no negative impact on our FHA business
- VA – Business as usual; minimal disruption
- GinnieMae – Will issue new securities; minimal impact on new issuer processing for at least the near future.
- USDA – Still waiting for guidance; Expect no Conditional Commitments during shutdown
- IRS – Apparently no 4506T’s during the shutdown…may negatively impact receiving back IRS transcripts
Here is the information from the Mortgage Bankers Association ot the MBA:
- “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.
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
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.”
Sounds like a big mess to me. How about you?