FHA, Ginnie Mae, VA and USDA Will Be Affected If There is A Government Shutdown!


FHA, Ginnie Mae, VA and USDA Will Be Affected If There is A Government Shutdown.

What does this mean for you? We would like to update you on the following

Implications of Government Shutdown
FHA Appraisal FAQs
Implications of Government Shutdown

While we are still hopeful that a shutdown will be avoided (or another continuing resolution passed), it is unlikely that there will be any decision until the last minute. We understand the President is meeting with Speaker Boehner and Senate Majority Leader Reid at 1:00 p.m. EDT today.

Below is the latest information we have on the implications at the housing agencies. However, no final decisions have apparently been made. We do expect FHA & Ginnie Mae will publish FAQs if the shutdown does occur.

FHA

We have been advised that FHA Connection will be operational except that we will not be able to perform CAIVRS’ checks or obtain insurance endorsements (including lender insurance). We will also not to be able to pay upfront premiums. However, we will be able to obtain case numbers.

We recommend that we run CAIVRS’ checks immediately on all loans that you want to close in the next week or two in case the shutdown does occur. A CAIVRS’ problem is likely the most immediate impediment to obtaining insurance once the loan the program is reinstated, and it is something that is required prior to our being able to issue an approval so it is possible that this could delay FHA closings.

Ginnie Mae

If a shutdown is announced, Ginnie Mae has told us that will publish FAQs and answers on the website to address program operations. We have been told that functions such as handling of principal and interest payments to investors in pools and “proceeding with pooling as pool or pool packaged are delivered” will continue. It is unlikely that Ginnie Mae will provide new commitment authority during the shutdown though no final decision has been made.

USDA

USDA has advised us that lenders will be able to close loans for which they had already received a commitment. However, lenders will not be able to get the Loan Note Guarantees for them until the shutdown is over.

During the shutdown, USDA will not issue any new commitments, meaning that if a USDA loan hasn’t been committed prior to the shutdown, it will have to wait until the shutdown ends and there will most likely be a delay due to a backlog. Unlike FHA, USDA will not operate GUS, its automated underwriting system, during any shutdown, meaning that we won’t be able to do preapprovals for files that are close to not meeting guidelines and for which there is any uncertainty about approvability.

VA

VA has indicated that they will continue business as usual during the shutdown. We have asked VA if there has been any change and are awaiting a response. The CAIVRS’ number piece could affect the timeliness of closing on a VA loan.

FHA Appraisal FAQs

FHA has posted revised Appraisal FAQs. FHA has added FAQs addressing the use of foreclosures as comparables and when a conventional appraisal can be used for a FHA loan. The link to the FAQs is:
http://www.hud.gov/offices/hsg/sfh/appr/aprval.pdf

We will update you on the possible shutdown as soon as we have new information.

If you have any questions on this, we strongly suggest that you contact a member of the Waterstone Mortgage team ASAP so that we can avoid potential delays due to the possible government shutdown. My team and I are here to help you.

Sue Botelho, Manager/Loan Officer – NMLS #262520
850-362-6901 | SBotelho@WaterstoneMortgage.com
www.Sue-Botelho.com

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