Congressional Leaders Approve Funding to Avert Gov’t Shutdown

In what likely amounts to welcome news ahead of the holidays, Congressional Democrats along with Senate Republicans have reportedly agreed to a $1.3 trillion spending plan ahead of a December 20 deadline, apparently averting the possibility of a new partial federal government shutdown as we head into 2020, according to reporting at the Washington Post.

The new spending deal includes priorities for both Democrats and Republicans while sidestepping the continuously contentious issue of border security, which was the sticking point that led to last year’s government shutdown. As part of the new agreement, funding levels for a barrier on the southern border will remain at their 2019 levels, $1.375 billion. This is largely seen as a major victory on the part of Republicans, who in the past have pushed back against Democrats who have sought to eliminate funding entirely for a border barrier of any kind.

However, Democrats did manage to gain a number of their own priorities in the new spending agreement, including $25 million in funding for federal gun violence research, $425 million in election security grants, and a $208 million funding increase for the Environmental Protection Agency (EPA).

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The House passed the legislation on Tuesday, and Senate Majority Leader Mitch McConnell (R-Ky.) offered his support, urging Senators to pass it when it comes to the floor of the chamber in the coming days. President Trump intends to sign the bill according to CNBC, citing a White House aide who spoke to reporters on Tuesday afternoon.

The news of a funding accord between both chambers of the United States Congress and the White House should provide some relief to the reverse mortgage industry as we prepare to enter the holidays. One year ago, Congress and the White House failed to reach a funding agreement, which resulted in the longest partial federal government shutdown in American history.

During the shutdown period last year, endorsements of Home Equity Conversion Mortgage (HECM) loans were halted one day after the Christmas holiday, which clouded industry endorsement metrics for months afterward.

While reverse mortgage originators reported that the course of daily business remained largely uninterrupted during the shutdown period, operations at the Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) functioned with limited staff resources, which also contributed to a HECM assignment claims backlog, according to FHA Commissioner Brian Montgomery.

Read the story on the funding agreement at the Washington Post.

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  • The partial government shutdown last December did little to harm the industry. The only damage it did was to delay endorsement counts and FHA Production Reports. On the other hand our insurer did have problems with minimal endorsement backlogs.

    The short term shutdown had no real or lasting impact on the industry. However, a long-term government shutdown could be problematic.

    It is best when government shutdowns are avoided altogether unless that is the only answer to a governing crisis.

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