Mortgage Info for Homes and Small Business Financing

Tag Archives: It’s the Economy Stupid

Length of Government Shutdown Spawns Mortgage Ramifications

Government Shutdown – Temporary Policy – Revised

Note just in from one of our lenders regarding updated policy due to shutdown.

If you are a federal government employee who expects to close a loan in the near future you may have to wait until the government gets funding and reopens.

FHLMC/LP (Freddie Mac) has issued updated guidance on the requirement to obtain Verbal Verification of Employment (VOE’s) for employees impacted by the government shutdown.

Effective immediately for loans in process and not yet closed:
Loans underwritten via FHLMC/LP for government employees, where a valid Verbal VOE cannot be obtained, WILL NOT be able to close without this documentation.

Apparently, this is the case with Fannie Mae / DU loans, also.

While the federal government shutdown persists, 4506-T tax transcripts and some Verifications of Employment for federal workers will be unavailable.  This lender will institute the following temporary policies effective immediately.  These temporary policies will expire when the shutdown is lifted and the federal government resumes business as usual.  These temporary policies may also be amended based on market conditions and length of the shutdown.

4506-T / Tax return Verification:

  • For all loans, a fully executed and accurate 4506-T form from the customer(s) is still required.
  • For most loans, if the tax transcripts cannot be obtained prior to closing due to the government shutdown, the condition for these tax transcripts prior to closing will be waived. (Exception – All tax returns and W2’s which are hand written must be verified with tax transcripts.  Underwriting also reserves the right to require tax transcripts if deemed warranted.)
  • All 4506-T forms will be processed for tax transcripts and validation post closing once the government shutdown is lifted.

Verbal Verification of Employment:

  • FHA/VA Loans and Non-Agency Jumbo Loans Loans for government employees, where a valid Verbal VOE cannot be obtained prior to closing, WILL NOT be able to close without this documentation.
  • FNMA/ DU Loans and FHLMC/ LP Loans underwritten via FNMA/ DU or FHLMC/ LP for Government Employees, where a valid Verbal VOE cannot be obtained, WILL NOT be able to close without this documentation.

Bottom line:  Your loan won’t close without a valid, lender or third party initiated verbal verification of employment (vVOE).

 

Facebooktwittergoogle_pluslinkedinmail

US Treasury to Invest Directly in Banks

•  Current plans have $250 billion of the $700 billion bailout fund going directly to the purchase of bank equity (stock).  Nine financial institutions were identified this evening:  Wells Fargo, JP Morgan, Citibank and Bank of America in the first tier, Goldman Sachs, Merrill Lynch and Morgan Stanley in the 2nd tier and Mellon and State… Continue Reading

Tips, Tricks and Mortgage MoJo
Get the latest content first.
Your privacy is always respected.