Friday, April 8, 2011 - Article by: Jim Thomas - Private Real Estate Advisor -
If the government does shut down here is what we have been able to learn so far as to the affects this will have on the mortgage business.
Government shutdown will affect our ability to reach staff at the VA Regional Loan Centers, etc.VA Staff will not be available to process VA 26-8937 Verification of Benefits forms. The VA Portal System will be functional for case assignments, appraiser assignments, Automated Certificates of Eligibility etc. Automated underwriting systems are not impacted. VA Loan Guaranty will be functional through VA Portal system It appears VA lending will continue as "business as usual" with minimal impact as long as the shutdown is minimal. We should have ability to work through a few various "quirks" as long as the shutdown doesn't extend past a couple days.
Government shutdown will obviously affect our ability to reach staff at the local service centers and state offices. USDA Staff will not be available to underwrite our loans and issue Conditional Commitments. A shutdown will fully impact USDA lending operations. GUS (USDA's guaranteed underwriting system) will not be functional, and that any other function performed by any actual body within USDA will not be operational. We may be able to originate, process and underwrite USDA loans but may be unable to close, fund or commit them during a shutdown due the inability to obtain the conditional commitments from USDA the reserve funds, etc.
We are still waiting to hear back from HUD to clarify the exact functions that will remain with FHA Connection. We have been able to confirm CAIVRS will be impacted. However the exact extent of other various functions remains unclear. At this time we are not certain if we will still be able to obtain new case assignments, log appraisals, transfer cases, etc. We do know that insuring will be impacted. FHA Automated Underwriting/TOTAL Scorecard should not be impacted. We are not sure if we will be able to obtain Case Numbers.
Conventional Lending (Fannie Mae/Freddie Mac) should not be impacted by the shutdown. We should be able to continue business as usual with conventional lending. Other agencies that will be shut down that will indirectly impact lending for us: IRS for tax transcripts. We confirmed with an IRS agent that if there is a Gov. shutdown, there will be NO ability to have transcript orders processed. (Even if we were to have borrowers request them using the electronic option at www.irs.gov, they still wouldn't be processed). Social Security Administration for SSA Verifications: We confirmed with an SSA agent that if there is a Gov. shut down, there will be NO ability to have SSA orders processed. We are also trying to confirm the affects a shutdown could have with things on the closing and funding end of our business and we will provide more information as it becomes available. Remember the last day for us to obtain FHA Case numbers for the current MIP factor is Saturday April 16th. However last time we had the MIP changes the FHA website was down on Saturday as they were upgrading their system. To obtain a FHA Case Number we must have an accepted purchase agreement and signed/dated mortgage application documents. If the gov't does shut down tonight and remains shutdown thru clients that don't have accepted purchase agreements or signed mortgage applications will receive the higher MIP.
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