Gov’t shutDOWN and FHA loans – don’t get stranded at the closing table!

October 15, 2013 — Leave a comment

uncle-sam-warns-of-government-shutdownThe FHA, due to the shutdown, sent out a bulletin with a list of Q&As. *important read for agents AND lenders

Q:  Can I get an FHA case number? A:  Yes. Lenders will be able to obtain an FHA case number from the FHA Connection.

Q:  Will FHA endorse single family loans during a shutdown? A:  FHA will be able to endorse single family loans, with the exception of Home Equity Conversion Mortgages (HECM) and Title I loans, during the shutdown. A limited number of FHA staff will be available to endorse new loans. Due to limited staff, the time to endorse the cases may be extended.

Q:  Will FHA still be able to endorse my loan if I am not able to obtain tax returns verified by the IRS during the shutdown? A:  FHA is aware that some lenders obtain tax transcripts directly from the IRS for use in underwriting their FHA-insured loans. These lenders may be unable to actually obtain any returns directly from the IRS for the duration of the Government shutdown.”

The bulletin went on.

“Lenders may continue originating loans using FHA’s existing underwriting requirements, which have not changed as a result of the shutdown.

Lenders are required to obtain tax returns from certain borrowers in order to originate FHA-insured loans and lenders must also continue to obtain the borrower’s signed authorization (i.e., Forms IRS 4506, IRS 8821, or whatever form or electronic retrieval service is appropriate) for any loan for which the borrower’s tax returns are required.”

The bulletin and questions can be found on the FHA’s FAQ site, goes on to address “Why didn’t the borrower’s name and Social Security Number pass validation with the Social Security Administration?”, “Can the Social Security Number validation be run again?”, “Can I continue to process the loan without the Social Security Number validation?”, and “What happens if I cannot validate the borrower’s SSN?”.

Questions?? ask cole@coleholmes.com !

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