Thursday, October 3, 2013

Kentucky Mortgage Loans for FHA, VA, USDA and Fannie Mae and the Government Shutdown effects

October 3, 2013
The Government shutdown has had the following effects on the type of mortgage loans in Kentucky
 In response to the various areas affected, most mortgage companies in Kentucky have  temporarily implemented the following policies and guidance:
4506-T Transcripts. Due to the shutdown, IRS transcripts cannot be processed at this time. Previously we communicated in Announcement 13-29 that transcripts are required to close loans. However, in light of the ongoing shutdown,  will temporarily accept at a minimum the items listed below in order to allow the loan to close in lieu of transcripts. If the borrowers are unable to provide complete copies of the tax returns and/or agree to and sign the certification, then the loan cannot close.

Items needed prior to clearing loan for closing:
  • Copies of all borrowers complete federal tax returns for tax years 2012 and 2011, signed by the borrowers
  • .

Please submit the above documentation for any loans still pending tax return transcripts for review by underwriting staff. If the documentation submitted at a minimum meets both the above and AUS requirements and no other discrepancies exist, the loan will be allowed to close without transcripts provided that all other conditions are satisfied.
FHA. The FHA website, and all services provided by it, is still in operation. Please bear in mind that some manual functions performed by FHA staff may be delayed, such as case number cancellations.
VA. The Veteran's Administration offices are still operational, as well as, the VA Portal.
USDA. As stated in Announcement 13-30, all USDA offices are closed and the GUS automated approval system is also unavailable at this time. No new or existing USDA loans can be submitted through GUS. Therefore, any new or existing USDA loans will be underwritten and then placed into "suspense" status pending GUS availability.

FEMA.  Mortgage still requires satisfactory flood certification and if required, satisfactory sufficient flood insurance. If either of these items cannot to be provided for any reason, then the loan will not be able to close until they are available.