Fannie Mae takes initiative during the government shutdown

As we all know, the government shutdown is going to be a massive pain in our side. Many people will be furloughed with no pay (and with no way to tell when they can return to work), and all things government-run will be closed to the public. I think it’s safe to say that no one is excited about the government’s choice.

However, those who are in the process of applying for a mortgage will face an even bigger obstacle than the average American citizen. Under Fannie Mae guidelines, before a lender can approve a housing loan, social security information, tax transcripts, and employment must be all be verified … through the government.

Under normal circumstances, this wouldn’t be too big of a deal. The process alone should take no more than a few days. However, government shutdowns don’t usually come with time limits, which means that these borrowers could be waiting months to get a new housing loan.

As if that isn’t enough, the Federal Housing Administration is taking a hit! Under the shutdown, only 337 staff members are working out of the 8,709 total staff. This means that the U.S could see a decline in home sales during an extended shutdown period.  

Luckily, Fannie Mae has recognized that, even with a shutdown, the show must go on. To accommodate these borrowers, the federal lender has reevaluated these rules and come up with temporary measures that will make borrowing a loan easier.

According to the Fannie Mae website, lenders can now close alone without verifying social security and IRS tax information. Fannie Mae asks that lenders approve all of this information before a loan is delivered. The new policy also states that credit bureau reporting has been suspended.

If Fannie Mae hasn’t been nice enough, the government-funded lender is giving government workers a break, as well. Under the new guidelines, those who cannot afford to pay their mortgage because of being out of work under the shutdown will have their late fees waived.

Yes, the government shutdown is going to affect Americans for as long as Republicans and Democrats decide they can’t get along. However, it’s nice to know that Fannie Mae is trying to come up with ways to keep the housing market rolling!

To learn more about how the shutdown is affecting mortgage loans, visit www.fanniemae.com to read Fannie Mae’s Lender Letter LL-2013-08 (October 1, 2013). The National Servicing Organization can be reached at 888-326-6435.

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