FHA answers questions about shutdown’s impact
The Federal Housing Administration FHA says it has received a number of questions about the government shutdown and its impact on FHA loans. As a result, it issued a list of questions and answers:Can I get an FHA case number?Yes. Lenders will be able to obtain an FHA case number from the FHA Connection. Will FHA endorse single-family loans during a shutdown?FHA will be able to endorse single-family loans, with the exception of Home Equity Conversion Mortgages HECM and Title I loans, during the shutdown. A limited number of FHA staff will be available to endorse new loans. Due to limited staff, the time to endorse the cases may be extended. Will FHA still be able to endorse my loan if I am not able to obtain tax returns verified by the IRS during the shutdown?Some lenders obtain tax transcripts directly from the IRS when underwriting their FHA-insured loans. But these lenders may be unable to obtain returns directly from the IRS for the duration of the government shutdown. Lenders may continue originating loans using FHA’s existing underwriting requirements, which have not changed. Lenders must obtain tax returns from certain borrowers in order to originate FHA-insured loans, and the borrower’s signed authorization i.e., Forms IRS 4506, IRS 8821, or whatever form or electronic retrieval service is appropriate for any loan for which the borrower’s tax returns are required. Why didn’t the borrower’s name and Social Security Number pass validation with the Social Security Administration?When the lender requests a FHA case number, the borrower’s name, date of birth, Social Security Number SSN and property address are entered into FHA Connection FHAC. If the matching process with Social Security Administrations SSA fails, a “Case Warning for SSN Validation” will be placed on the case number.The failure could occur because the data doesn’t match or because the SSA system went offline due to the government shutdown. SSA has limited tolerance for minor mistakes in names, birth dates and social security numbers. Can the Social Security Number validation be run again?Lenders can make necessary corrections and try a second time to validate with SSA. Any changes made to the borrower’s name, birth date and SSN at any time prior to insurance endorsement will trigger a validation request with SSA. If the revised data passes validation, the Case Warning for SSN Validation is removed. However, if the failure was caused by the government shutdown, the Case Warning for SSN Validation will not be able to be removed until the government reopens.