Freddie Mac wants its customers and business
partners to know they are open for business and largely unaffected by the
government shutdown. Despite their
conservatorship status, Freddie Mac and Fannie Mae are still private businesses
and operate outside of the federal appropriations process. While the guidelines for USDA aren't yet clear, The Department of Veterans Affairs will remain open.
Not so for the
Department of Housing and Urban Development which sent out a short note saying
that most HUD programs have been temporarily interrupted and most employees
told they cannot work. Obviously loans
being processed through the Federal Housing Administration (FHA) will
Freddie Mac issued a press release this morning outlining
areas where loan originators and servicers may encounter problems arising from
the shutdown and offering suggestions to minimize any inconvenience to themselves
or their borrowers. Probably most
important is the notification to servicers that borrowers who are affected by
the shutdown are eligible for the usual relief options in the company's Single-Family Seller/Servicer Guide (Guide).
are advised that they do not need to obtain employment verification or
re-verification for a loan to a government employee prior to closing if the
government office that must provide the verification is closed when the loan is
scheduled to close. Nor do they need to
obtain that verification after the shutdown ends. Freddie Mac says this exception does not
apply to income verification or any other requirements and reminds lenders they
remain bound by the representations and warranties as stated in the Guide.
needing an executed IRS Form 4506-T, Request for Transcript of Tax Return only need to have it signed by the borrower
not processed by IRS prior to closing.
However, the actual 4506-T information must be obtained. Servicers must have that form or the EZ
version as applicable, processed by the IRS prior to evaluating a borrower for
the Home Affordable Modification Program (HAMP) or other workout option if
processing of these forms is required. If
the servicer is unable to obtain tax transcripts from the IRS through
electronic processing of an executed form then they must obtain a copy of the
tax return from the borrower, if required.
Mac said they will provide updates if they find that any of their business
practices are impeded by the current government interruption.