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10/01/2013

Government Closed no Mortgage





Mortgage Investors and the agencies have communicated that they continue to operate business-as-usual and enforce their standard policies and guidelines. BUT cough. Only, Hopefully, lenders will follow this practice and continue to operate business-as-usual. Without the tools needed: the screwdriver, hammer and  show up for work U. S. government stamp on  loan originations, rate lock management, risk assessment, borrowers, realtors, home owners will experience closing and funding disruption. The government shutdown may slow, delay or tangle your loan closing.
"Mine government is the main source of real estate mortgage loans" -- call your Republican Congressman (woman) (person of interest)

October 1 2013 the United States Government and many American Federal offices were closed. What details will be shutdown that relate to home loans?

·         4506-T’s – The IRS is not validating tax transcripts at this time. The IRS is mostly closed and employees are send home without pay. Tax transcript validation is needed to close mortgage loans and verify that Borrowers/ Buyers / Homeowners actually filed the returns they supplied. Once submitted to the 4506-T vendor, most vendors will hold 4506-T submissions in queue for processing when government services are again available. 4506-T requirements for loan submission and funding are unchanged, without this information funding is not going to move forward. 

·         SSN Validations – The Social Security Administration is not validating social security numbers at this time. Once submitted to the SSN vendor, the vendor will hold the submission for processing when government services are again available. SSN validation requirements for loan funding are unchanged for mortgage bankers, banks, lenders, etc...

·         USPS Address Verifications – USPS address verifications are available.

·         Federal Government Employee Verbal Verifications of Employment – Investors and agencies require that VVOE’s be conducted on all loans, and specifically when the lender knows or believes that there has been a disruption in employment. To ensure that mortgage lenders meet investor and agency requirements,  verbal verification of employment (VVOE) can be documented, and also re-verify employment at funding for all federal government employees. Loans to federal government employees can close once the requirements for VVOE are met. 

·         Rate Locks and Rate Lock Extensions – The  rate lock and extension policy continues unchanged at this time. Rate lock fails are the responsibility of the Borrower, without funding source, information sources and the United States Government (thank you President Obama and the Republican factions for not compromising) cooperating closing a government loan (i.e.: 95% of all residential loans in the United States are halted, frozen, in limbo not good)

·         FHA/VA – The following FHA/VA services remain available at this time:
a. CAIVRS
b. Appraisal Logging
c. Case Number Assignments
d. LDP/GSA

·         USDA – The USDA has discontinued operations at this time. Continue following  policy regarding conditional commitments. USDA loans can proceed with closing when  conditional commitment requirements are met. Locks on USDA loans that have not received conditional commitment are not permitted. The impact on GUS approvals is being assessed. 

·         FEMA – Impacts to FEMA operations are still being assessed. Flood certifications will not be available after a few days. It is anticipated that while flood certificates will be available, disputes and redetermination requests will not be responded to during this event. In 1995 this went on for 22 days. The repercussions for government loans, was a backlog of 30 plus +days.

 

 



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