This Day On The Street
Continue to site
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

Fannie Mae Responds to Shutdown With New Guidelines

NEW YORK ( TheStreet) -- Fannie Mae (FNMA) has introduced new, temporary guidelines to servicers and sellers of single-family loans in response to the government shutdown.

The housing giant is unaffected by the shutdown as it is still a private company, albeit in conservatorship.

However, the government shutdown still threatens to delay the process of obtaining a home loan. Fannie Mae required lenders in some cases to verify Social Security numbers and Internal Revenue Service Tax transcripts but will be unable to do so during the shutdown.

Verifying employment could also prove to be difficult in the case of government workers affected by the furloughs.

However, Fannie Mae has temporarily revised its selling guidelines to permit lenders to verify Social Security and IRS transcripts after the closing of the loan but before the delivery of the loan. If the transcripts and Social Security number cannot be validated prior to the delivery of the sale, however, the loan would not be considered eligible for sale to Fannie Mae.

Also, the shutdown may impact the ability of government workers to make scheduled mortgage payments. Fannie Mae permits servicers to offer these workers an unemployment forbearance plan for a period of six months or until the shutdown period expires, whichever is first.

Servicers must also suspend credit bureau reporting for borrowers granted unemployment forbearance related to the shutdown.

They must also waive late payment charges if the borrower's payment is late because he or she has been furloughed or received reduced pay as a result of the shutdown and accepts a relief option from the servicer.

The changes to the guidelines are temporary and will expire when the federal government resumes operations. If the government shutdown lasts for a prolonged period, the agency might provide further guidance.

The Department of Housing and Urban Development has warned that a prolonged shutdown could affect sales of homes and the housing recovery.

While the Federal Housing Administration will continue to endorse loans, it is working with a limited staff and borrowers should expect delays, the agency said.

-- Written by Shanthi Bharatwaj New York.

>Contact by Email.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FNMA $1.74 2.35%
XLF $23.52 0.90%
AAPL $93.85 0.12%
FB $117.75 0.14%
GOOG $698.21 0.75%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs