April 8th, 2011 6:10 AM by Kathy Delbridge
Potential Government Shutdown / Impact to Government Loans - MUST READ!
Implications of Government Shutdown
While we are still hopeful that a shutdown will be avoided (or another continuing resolution passed), it is unlikely that there will be any decision until the last minute. We understand the President is meeting with Speaker Boehner and Senate Majority Leader Reid at 1:00 p.m. EDT today.
Below is the latest information we have on the implications at the housing agencies. However, no final decisions have apparently been made. We do expect FHA & Ginnie Mae will publish FAQs if the shutdown does occur.
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). You will also not to be able to pay upfront premiums. However, we have been told that you will be able to obtain case numbers.
We recommend that clients ( this is the lender) 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.
If a shutdown is announced, Ginnie Mae has told us that will publish FAQs and answers on the website to address program operations. We have been told that functions such as handling of principal and interest payments to investors in pools and "proceeding with pooling as pool or pool packaged are delivered" will continue. It is unlikely that Ginnie Mae will provide new commitment authority during the shutdown though no final decision has been made.
USDA has advised us that lenders will be able to close loans for which they had already received a commitment. However, lenders 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 has indicated that they will continue business as usual during the shutdown. We have asked VA if there has been any change.
We will update you on the possible shutdown as soon as we have new information.
Let's pray we do not get affected by this, but we must be prepared just in case.