Did you hear about a possible Government shutdown - Which could affect FHA loans & USDA loans

By
Mortgage and Lending with Social Media - Infinity Home Mortgage Company, Inc

Has the government gone fishing again?

 

Be prepared for the worse !!!! 

Not sure if many of you know, but there is a possible government shutdown looming. This would affect FHA loans and possibly other mortgages. There are still talks on Capital Hill between the Democrats and the Republicans, if not solved, could shut down many parts of the government come Friday April 7th. The government funding bill expires on Friday at midnight.

Be aware this could affect the ability to get transcripts for IRS loans as well as more importantly, FHA case numbers. Not only could this delay the lender in obtaining a FHA case number, but FHA is increasing the annual mortgage insurance which goes into effect on April 18th, 2011.  ~ FHA monthly mortgage insurance changes April 2011 ~

 

 

The ending result is that this could affect thousands of home buyers if this issue is not resolved. Especially because the usage of FHA loans have increased over the years. New mortgage numbers state that 35 percent of all mortgages are FHA loans. Many don’t realize that sometimes a buyer might need a few days before a specific deadline because the FHA case number could go into a “holds tracking” status. There are various reasons why this might happen., but the fact remaining, that file is placed on hold. So if a buyer is applying on April 17th and the result is a “holds tracking” status, and it takes 2 days for the case number to clear, that borrower would miss the deadline for the new change. This would result in a higher mortgage payment.

On another note, some of us are still trying to see if this will affect USDA loans also. From one source, I am told that it would shut down USDA loans, which means the USDA won't be able to underwrite the loans.  I am waiting for some USDA officials to get back to me and I will update this post accordingly, unless someone knows otherwise.

 

Summary : Overall, this could affect so many other types of jobs. It still boggles my mind that the government is doing many things last minute. For a few years we had the national flood insurance issues that would come down to the last minute and so much more. People need to be aware of this, because this could affect thousands of home buyers and or delay closings, especially those applying for FHA loans.

On a side note, did you know that this would affect the military also? What about those military personnel with families in the United States who aren't working, depending on their spouses military checks. Again, why must we always wait until the last minute. Why can't we as a powerful nation, how some sort of emergency back up plan, for those that can't seem to agree on Capital Hill.

Here is an article by Kimberly Schwandt describing what jobs could be effected.  ~ Administration paints picture of possible government shutdown ~

 

Key Reminder : Some lenders might take more risks than others, in what they will originate & close if the government shuts down.

 

MARK LAPP wrote this post today, 4/8/11 and gave some more details if the government shits down... what it will do to lending...

 

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Copyright © 2011 by Jeff Belonger of Infinity Home Mortgage Company, Inc

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Gary Miljour 04/07/2011 07:11 PM
Topic:
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Rainmaker
102,117
Larry Costa
Century 21 Classic Gold, Carver MA - Carver, MA
Realtor, Carver MA Real Estate

Hi Jeff, I hadn't heard this is effecting the mortgage part of the Government. That would be a big problem.

Apr 07, 2011 01:16 PM #1
Rainmaker
591,126
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Jeff,

I'm on both sides of this issue. I'd like them to shut down until 1-20-2013!

But, I feel for the innocents citizen who voted conservatively! There are no innocent liberals we can't go on spending our great grand children's money!

Bill

Apr 07, 2011 01:42 PM #2
Ambassador
293,601
Linda K. Mayer
License # 01767321 - La Verne, CA
Realtor, SRES, SoCAL, A REALTOR YOU CAN TRUST

Jeff, this would not only affect my/our business, but my husband is an Air Traffic Controller.  He said that the last couple of times they got paid anyway, but I heard on the news this morning that this may not be the case this time around.... kinda scary!

Apr 07, 2011 02:06 PM #3
Ambassador
738,937
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

 

UPDATE from this afternoon -

FHA

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

We recommend that you 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.

USDA

USDA has advised us that lenders will be able to close loans for which they had already received a commitment.   However, we 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 or Loan Note Guarantees for closed loans.  Unlike FHA, USDA will not operate GUS, its automated system,  during any shutdown.

VA

VA has indicated that they will continue business as usual during the shutdown.  We just confirmed that with VA.  VA said that you can still originate loans, submit funding fees, transmit servicing information to VALERI, assign appraisals, etc. 

 

Apr 07, 2011 03:28 PM #4
Rainmaker
648,019
William James Walton Sr.
WEICHERT, REALTORS® - Briotti Group - Waterbury, CT
Greater Waterbury Real Estate

Jeff, do you know what happened the last time there was a government shut-down, back in the mid 90's? That would be some sort of guide, no?

Apr 07, 2011 05:02 PM #5
Rainmaker
139,112
Gary Miljour
Starboard Financial - Tempe, AZ
Mortgage Lending for Arizona and California

Jeff-  Great Blog.  I am more worried about this than the broker compensation issue.  I will have to re-post this on my fan page.  Great Info. 

Apr 07, 2011 07:09 PM #6
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Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans
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Marilyn Boudreaux
Marilyn Boudreaux, Century 21 Mike D. Bono & Co.'s - Lake Charles, LA
Lake Charles LA Century 21 Realtor

I heard no shut down, money was extended

Apr 08, 2011 01:41 AM #8
Rainmaker
1,077,083
Ginny Gorman
Phillips Post Road Realty ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in North Kingstown RI and beyond

Jeff, it could have been a disaster...no sense here and why did we elect these people...wasn't it to do the right thing?

Apr 08, 2011 07:51 AM #9
Rainmaker
1,842,269
Gabe Sanders
the BlueWater Realty team specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

I hope those loonies in Washington get their act together and think about more than their political future.

Apr 08, 2011 08:06 AM #10
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Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

 

GARY.. thanks for reblogging this and for the polite compliment.

MARYILYN... where did you hear this?  I have been searching the net and nothing... and I even came across an article yesterday talking about an extension, but that the President would veto any such extension. thanks

GINNY... . it could have been? It's not going to happen now? I am still reading articles this morning, that nothing has happened yet. I am just trying to find the correct source... thanks

GABE.... . yea, right... don't hold your breath...

 

Apr 08, 2011 09:02 AM #11
Ambassador
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Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

 

MARK LAPP gave some more details if the government shits down... what it will do to lending...

The affect of a Government shutdown

 

Apr 08, 2011 10:45 AM #12
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