The Federal Housing Administration is calling on lenders to be “sensitive” to borrowers and the financial hardships they may be facings as a result of the federal government shutdown.
Borrowers may be impacted by furlough, being laid off, or having their incomes reduced in relation to the shutdown, said FHA in a Friday notice to agency-approved lenders and mortgagees.
“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.”
The FHA says it expects lenders to “make every effort” to communicate with and assist affected borrowers as much as possible by extending informal forbearance plans to those facing shutdown-induced financial hardship and fully evaluating borrowers for available lost mitigation options to avoid foreclosure, whenever possible.
Agency-approved mortgagees and lenders are also being encouraged to waive let fees for affected borrowers and suspend credit reporting on borrowers affected by the shutdown.
Fannie Mae, Freddie Mac, and the Veterans’ Administration are similarly urging lenders to protect federal workers impacted 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,” Galante added, “and in particular that responsible FHA borrowers impacted by the shut-down receive the support they need.”
Access Galante’s letter here.
Written by Alyssa Gerace