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| photo of me no makeup lol |
The United States Government shut down, again, may find some borrowers unable to close their loan.
This will disrupt banks who have offered rate locks and loan commitments because certain verification systems are run by our government, Do not expect Bank of America or Chase to extend your rate lock for free.
I have many work arounds and can close loans. Interest rates in the short term have actually gone down so holding on or paying to extend your lock is not necessary. We are going to close mortgage loans and get the necessary documentation from the IRS, USDA, FEMA and many others after the fact assuming this shut down is short term we should be able to help you. Although some government employees may feel the pain of not being paid over the holidays, here is my Christmas cheer. Call me and I'll assist.
(949) 784-9699
VA has already been funded for the
fiscal year. Unfortunately, USDA will not issue any new guarantees during
the shutdown. FHA and Ginnie Mae are expected continue core business
operations (e.g. FHA Connection would remain operational and Ginnie Mae would
issue new commitment authority for the foreseeable future.)
Important US Government lending topics:
- Tax Transcripts
- VA Lending
- HUD – FHA & Ginnie Mae
- USDA
- National Flood Insurance Program is Affected
- Verbal
Verification of Employment – Government Employees
In all cases, non-agency transactions are
subject to investor guidance
Effective Date:
The temporary policy changes outlined in this bulletin are effective
immediately and are in effect until further notice.
Tax
Transcripts
Wholesale/Retail – Applies to FHA, VA, USDA
& Agency:
- CMG is
temporarily suspending the requirement for IRS Tax or W-2 Transcripts to
close a mortgage loan. Completed 4506-T forms, signed at closing, continue
to be required.
Correspondent
– Applies to FHA, VA, USDA & Agency:
- IRS Tax
and W-2 Transcripts will not be required for loan delivery However, completed 4506-T forms, signed at closing, continue to be
required for loan delivery. Note: Correspondent Lender must obtain tax
transcripts on applicable loans when the federal government shutdown ends.
Once tax transcripts are received lender will compare the income documents
to the transcripts and loans with discrepancies may be subject to
repurchase.
For all channels, non agency loans must meet investor
specific requirements.
VA
Lending
Based on past
shutdowns, the VA has determined that housing is an "essential service”.
If the shutdown lasts for an extended period, additional delays may be
expected. As of today, the following apply:
·
Housing
is viewed as an essential service
Link to VA Contingency Plan:
HUD
– FHA & Ginnie Mae
FHA will continue
issuing case numbers and insuring loans. Per the Contingency Plan:
·
Will
insure single-family loans
·
Will
support the following origination operations
o
Case
numbers: Cancellations, reinstatements and transfers
o
Case
numbers are being assigned
o
Resolution
of the hold tracking queue
·
Will
review Notice of Return violations on pre-endorsement loans
·
Will
address any CAIVRS errors to avoid borrowers being denied a loan
·
FHA
systems (e.g. Connection and LEAP) will be operational
o
Actions
requiring interaction w/ FHA staff will either be delayed or suspended
·
Call
center (answers@HUD.gov) and National
Servicing Center will be operating
·
Condominium
project approvals under HUD Review and Approval Process (HRAP) will NOT be
processed. Eligible lenders will be permitted to continue to process
under DELRAP.
·
Servicing
issues will be supported. Payment of claims, servicing of Secretary-held
mortgages, ensuring continuity of FHA’s REO disposition process and servicer
mitigation activities will continue.
· IRS Tax or W-2 Transcripts to
close a mortgage loan to be gathered after the fact. (See “Tax Transcripts” in this announcement)
Link to HUD Contingency Plan:
USDA
No
new RD rural housing conditional commitments or loan guarantees will be issued.
·
Loans
closed during a shutdown are done at the lender’s risk.
·
Loans
w/ conditional commitments cannot be guaranteed until the shutdown is ended.
·
The
Lender Interactive Network Connection (LINC) is expected to be operational.
o
This
includes GUS and other front-end systems
·
At
this time, few will allow funding/purchase of USDA loans that already have the
conditional commitment but not the guarantee.
Link USDA Rural Development Contingency Plan:
National
Flood Insurance Program Is Affected
NFIP will not be issuing new or renewing any policies
during the shutdown. When flood insurance is required, proof either at or
prior to funding of a complete current "in-force" flood insurance
policy must be obtained. Sufficient content to be able to determine
adequacy of coverage and appropriate dates of coverage that is dated on or
before December 21, 2018 is required. If the borrower does not produce
acceptable proof of flood insurance coverage for the minimum amount required,
the loan is not eligible to be closed/purchased. Exceptions are not
permitted for any reason.
Acceptable evidence of Flood Insurance when both the
application for the coverage and proof of paid receipt are dated prior to
December 22, 2018:
- a
complete application for flood insurance signed by the insurance agent,
and
- application
content must be sufficient to be able to determine adequacy of coverage
and appropriate dates of coverage accompanied by a paid receipt, and
- loans
that do not have proper evidence of active flood insurance at closing must
receive exception approved from Corporate Credit, and
- steps
must be taken to follow up that the coverage is issued and activated once
the NFIP insurance authority is renewed.
In
instances where the premium is paid at closing, a Closing Disclosure that
evidences premium payment is an acceptable form of paid receipt. Both the
application for the coverage and proof of paid receipt must be dated prior to
December 22, 2018.
Private Flood: Policies from private
insurers are not impacted by the NFIP hiatus and are an acceptable form of
flood insurance if allowed by the loan program/final investor
FHA Reminder: FHA does not
accept private flood insurance. FHA has an FAQ that states:
A property is not eligible for FHA insurance if:
·
a residential building and related improvements
to the property are located within SFHA Zone A, a Special Flood Zone Area ,or
Zone V, a Coastal Area, and insurance under the National Flood
Insurance Program (NFIP) is not available in the community.
Links:
Verbal
Verification of Employment – Government Employees
- Borrowers employed by the
federal government where a VVOE cannot be obtained prior to closing are
not eligible. Borrowers must return to work prior to closing in
order to use the income for qualification purposes.
- As a reminder, if the borrower is
in the military, a military Leave and Earnings Statement (LES) dated
within 30 days of closing is acceptable in lieu of a VVOE.
I am working today while #mnuchin parties with movie stars and tells the banks not to allow a run.
