October 14, 2013
The FHA and HUD have issued a statement requesting that participating FHA lenders be “sensitive” to the plight of those borrowers with incomes affected by the government shutdown. According to HUDNo.13-152, “The Federal Housing Administration (FHA) today called on all approved mortgagees and lenders to be sensitive to the financial hardships faced by borrowers as a result of the shutdown, including those borrowers subject to furlough, layoff, or a reduction in income related to the shutdown.”
The press release adds, “FHA expects all approved mortgagees and lenders to make every effort to communicate with and assist affected borrowers to the greatest extent possible by:
- extending informal forbearance plans to borrowers facing financial hardship as a result of the shutdown, and
- fully evaluating borrowers for available loss mitigation options to avoid foreclosure whenever possible.”
The FHA Commissioner was quoted in the release saying that the agency is working to insure the government shutdown doesn’t reverse the effects of recent housing market gains.
“These dedicated public servants, through no fault of their own, are now forced to find a way to meet their ongoing financial obligations without their usual salaries,” said FHA Commissioner Carol Galante in a letter to FHA-approved lenders and mortgagees. “In many instances these are the same employees who have already lost pay during recent sequestration related furloughs.”
FHA is also strongly encouraging all approved mortgagees and lenders to waive late fees for affected borrowers and to suspend credit reporting on borrowers nationwide who have been affected by the shutdown.
“FHA is working to ensure that the hard won improvement in the housing market is not substantially compromised by the government shutdown and, in particular, that responsible FHA borrowers impacted by the shut-down receive the support they need,” Galante added.
FHA home loans are still available during the government shutdown-borrowers can apply or get pre-approved at FHA.com, which is a private company and not a government agency.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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