Today the FHA asked all approved mortgagees and lenders to be understanding with homeowners who have been affected by the Governments shutdown. Fannie Mae, Freddie Mac and the Veterans Administration have also requested lenders to take action in protecting federal workers impacted by the shutdown. All entities are also requesting that lenders temporarily halt credit reporting and late fees.
“FHA is working to ensure that the hard won improvement in the housing market is not substantially compromised by the government shutdown and, in particular, that responsible FHA borrowers impacted by the shut-down receive the support they need,” Galante added.
The current Republican mantra in Washington is to completely eradicate the Governments role in the mortgage industry. If Fannie Mae and Freddie Mac were already closed I fear this request would fall on completely deaf ears. Not to mention these requests are just that requests not every lender is going to comply with the FHA’s plea. Honestly why should they the current dysfunction in Washington is not their doing.
The current amount of homeowners insured by the Government is the only reason lenders will comply. This would be a complete disaster in the mortgage industry if the mortgage industry was completely privatized.