This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Banks Ready for Shutdown Mortgage Fallout

NEW YORK ( TheStreet) -- A government shutdown will curb mortgage processing at some large banks, especially if Uncle Sam goes dark an extended period of time.

A spokesman for the Federal Housing Administration told TheStreet that if the government does shut down it "will not be able to endorse any single-family loans, and staff will not be available to underwrite and approve new loans."

The FHA backs a large swathe of the single family and multifamily mortgages in the U.S. that are eventually underwritten by private banks.

Several banks are beginning to plan on how to handle their mortgage business in the event of a government shutdown.

"Based on our current knowledge, Bank of America Home Loans will continue originating and closing FHA and VA mortgages in the event of a short-term shutdown of the federal government," Bank of America (BAC - Get Report) says in an email statement.

JPMorgan (JPM - Get Report) says that it will not be able to originate new home loans, but will close mortgages that have already been approved by the FHS, a bank spokesperson says.

A Wells Fargo (WFC - Get Report) spokesperson says that the bank will be able to take applications and continue FHA loans "in most situations."

"There may be circumstances that require the FHA to sign off on loans and in this case these loans will be delayed. If a shutdown goes on for an extended period we will have to reevaluate the situation," the Wells Fargo spokesperson says.

A representative from Freddie Mac said that business will continue as usual at the lender, "at least in the short term." Business at Fannie Mae is also expected to continue as usual, according to published reports.

--Written by Maria Woehr in New York.

Readers Also Like:


To contact the writer of this article, click here: Maria Woehr.

To follow the writer on Twitter, go to http://twitter.com/newsgirlmw.

To submit a news tip, send an email to: tips@thestreet.com.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BAC $16.69 -1.48%
JPM $66.82 -0.76%
WFC $56.27 -0.30%
AAPL $125.69 -0.25%
FB $87.25 -0.34%

Markets

DOW 17,776.91 +93.33 0.53%
S&P 500 2,081.34 +12.58 0.61%
NASDAQ 4,997.4590 +5.5190 0.11%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs