As you are aware Federal agencies have shut down large portions of the government effective today October 1, 2013. The information outlined below addresses the impact on the mortgage industry:
HUD / FHA:
The FHA should not be significantly impacted, providing the shutdown is brief. HUD has provided the following information that applies to our daily operations:
Should FHA run out of commitment authority during a shutdown, then all lenders’ Lender Insurance approval will be temporarily suspended.
Continue originating VA loans; the Department of Veterans Affairs (VA) will continue to operate if there is a government shutdown.
Ordering appraisals the Veterans Information Portal will still be available.
Internal Revenue Service (IRS):
The IRS has indicated that they will not process any forms, including the issuance of tax return transcripts (Form 4506T) during a government shutdown, which will delay loan processing.
Social Security Administration (SSA):
In previous shutdowns, the SSA has only retained employees that deal directly with the processing of new claims and benefits. The likelihood is we would not be able to continue to verify SSNs through the SSA, which will delay loan processing.
Expect delays with obtaining tax return transcripts and SSA verifications.
Rural Housing / USDA:
When a CR is passed, we fully expect the USDA will issue Conditional Commitments with the language “subject to availability of funds…” until funds are loaded. Wallick and Volk will fund USDA loans with this modified “subject to availability of funds…” language. Historically, it usually takes about 3-4 weeks to load funds and generate Loan Note Guarantees.