Although new endorsements of Home Equity Conversion Mortgages (HECMs) have been halted due to the partial government shutdown that began on December 22, reverse mortgage originators are largely conducting business as usual in spite of the gridlock plaguing Washington, D.C. Certain FHA services related to pre-existing HECM loans will still be available during the shutdown, according to an announcement from the U.S. Federal Housing Administration (FHA).
“The shutdown has not affected me at this point,” said Mike Peerless, Reverse Mortgage Director at Holland Financial Services in Ormond Beach, Fla. “If the shutdown is still in progress [by the time of my next closure] on January 18th, then I guess there will be a delay. I heard that the shutdown could last for months, and if that happens the results would not be good,” he said.
“It’s business as usual here,” said Christina Harmes of C2 Reverse in San Diego, Calif. “I thought we would see slow turn times if anything but it’s been normal. We polled our AE’s and they said it affects the lenders themselves, as brokers on the front end we aren’t affected much,” she said.
It’s also business as usual for Brandi Braley, a reverse mortgage originator with Neighborhood Mortgage in Bellingham, Wash. “I haven’t had any problems, so nothing has yet been held up by the government shutdown,” she said.
In FHA INFO #18-52 – which is currently unavailable on HUD’s website due to the shutdown and was obtained in an email to RMD staff – the agency details that HECM payments to existing borrowers will continue during the shutdown period. Certain technological resources including FHA Connection (FHAC) and the Loan Review System (LRS) will also be available, but will have “limited capability for actions that require FHA staff intervention,” the agency said.
Additionally, while HECM payments to existing borrowers will be made, FHA warns that there will be, “limited staff assistance available and longer wait times for assistance” for those reaching out to the agency, including via phone and the firstname.lastname@example.org email address. The FHA Resource Center and its FAQ website will also remain available, but will not be updated during the shutdown.
A full breakdown of available services during the shutdown can be found in HUD’s Contingency Plan for Possible Lapse in Appropriations.
Continued dissension between the White House and Congress over financial appropriations related to border security has made the possible end of the current shutdown difficult to predict for both career politicians and political observers.
That possible end is further obfuscated by members of both major political parties being unlikely to budge from their respective positions, along with the upheaval that comes with a transition of power to another party in the House of Representatives, which took place late last week.