This Day On The Street
Continue to site right-arrow
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
TheStreet Open House

Fannie Mae Responds to Shutdown With New Guidelines

Stocks in this article: FNMAXLF

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.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,461.32 -153.49 -0.92%
S&P 500 1,927.11 -14.17 -0.73%
NASDAQ 4,382.8470 -36.6310 -0.83%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs