2022 Boise Idaho Real Estate Blog

Government Shutdown and how it is affecting Home Loans on Idaho

Main Idaho Real Estate Insights

Here is what we know as of now!

  1. Because a spending bill was not passed, some government agencies are shut down and staff is furloughed until funding is available
  2. Agencies that ARE impacted include; IRS, USDA, SSA, NFIP, and HUD/FHA
  3. Agencies that are NOT impacted by a shut-down include; FNMA/FHLMC, GNMA, & VA. Should be business as usual here. It is important to note that FHA is only impacted with Reverse Mortgages, New Condo Project Approvals and if a Borrower has a SSA hold/flag.

 

The specific impacts to the agencies noted above in #2 are:

IRS

  • The IRS sent a communication out on January 4th that even though they remain closed during the shutdown, they WILL begin processing requests for tax return transcripts again beginning on Monday the 7th. They are warning that it will take some time to work through their backlog, so we can expect vendors to experience longer than normal turn times on new requests and on the requests in the queue submitted previously.

USDA

  • All USDA staff is furloughed.
  • GUS (USDA’s AUS system) will remain available.
  • Loans with a conditional commitment already issued by a RHS office before the shutdown will be able to close as normal.

Loans that have not been reviewed by RHS staff and did not have a conditional commitment issued before the shut down will NOT be reviewed until after the shut down. This will impact closings as lenders cannot close a USDA loan without the conditional commitment issued. All USDA loans currently in progress cannot close (unless USDA has already issued the conditional commitment prior to the shutdown). I don’t see lenders working around this specific area because of the risk of having a loan that USDA will not insure.

  • Loans that have already closed but have not obtained the loan note guarantee prior to the shut down will also have that process delayed, potentially impacting secondary market operations.

SSA (Social Security Administration)

  • Third party vendors used to verify social security numbers may not receive responses from SSA during a shutdown. This has the potential to impact closings depending if there are specific alerts on the credit file.
  • Borrowers may not be able to obtain income benefit information in a timely manner during the shut down. This has the potential to impact closings.

The most common situations would be if there is a flag on a person’s SS number, then a lender would need to do a verification through the SSA office (which they cannot right now). Also, if the borrower is using SS income to qualify for the mortgage and cannot provide alternative documentation to verify the amount, then it could cause a problem with qualifying for a mortgage.

 

NFIP (National Flood Insurance Program)

This has been an interesting one and has changed multiple times this last week. As of Friday 12/28/2018, the NFIP has been re-instated and it is business as usual. There has been a lot of political “yelling” on this one.

FHA

  • Most functions at FHA will continue even with staff furloughed, FHA connection will remain available, TOTAL Scorecard, CAIVRS and Lender Insuring will all remain available presuming no technology glitches.
  • Systems and functions that will NOT remain available are:
    • Endorsements on HECM/Reverse mortgages. Biggest issue here would be HECMs (Reverse mortgages) as endorsements are on hold.
    • Homeownership Center staff will be furloughed so they will not complete HRAP condo project approvals that have been submitted. They recommend holding all submissions until the shut down is over
    • Loans with cases created during the shut down will have “holds” for the social security verification that happens in FHA connection. With the social security administration services also impacted this verification can not occur. Until this is resolved these loans with cases created during the shut down won’t be able to close until the shut down ends and we can remove the verification “hold”.

 

Cory Powell
Cory Powell, Idaho Home Loan Professional
Professional Loan Officer, NMLS#1458128
3959 E Overland Rd

 

Cory.Powell@FairwayMC.com  | 208.850.3363

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Posted by tlangford at 1/20/2019 8:45:00 PM

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