News & Press: The Road Home Newsletter

WHO PAYS? Government Shutdown Impacts Homeowners

Wednesday, January 9, 2019  
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    January 9, 2019

    WHO PAYS?  Government Shutdown Impacts Homeowners

    The partial shutdown of the U.S. government continues into its third week.  While there is much that can and has been said about who is to blame – we all can agree that the longer it continues, the more dire the consequences, and that these consequences hit homeowners and other taxpayers;  and most often those least able to deal with them are the ones hardest hit.

    Because this is only a partial shutdown (some parts of the government already had their 2019 budgets approved) and because some services deemed “essential” are not affected, it is difficult to determine what is or is not “shut down”.  In addition, some agencies have “reserve funds” that have allowed them to continue certain services, at least temporarily – and government actions have been taken to re-open other services that had closed but later were seen to be essential.

    For home buyers, or homeowners seeking to refinance, there are several government services that could impact the closing of a new loan.  These range from getting FHA appraisals; to getting FHA mortgage insurance endorsements; to approval of condominium projects as eligible for FHA mortgage insurance.  At the present time, availability of FHA-insured reverse mortgages has been shutdown.  Also, many services needed for new rural housing mortgages insured by the USDA may have been impacted.  The longer these interruptions continue, the greater the impact.   If you are currently involved in a purchase or refinance transaction, or looking to buy soon, be sure to ask:  your real estate agent, your homebuilder, and/or your lender because they may have unique perspectives on the impact of the shutdown and advice on how to navigate these troubled times.

    If you already have a home loan and will experience an interruption of income due to the shutdown, it is equally important that you talk to your lender or mortgage servicer. 

    It may be easier to arrange for a deferred or reduced payment before the payment is due than after it is delinquent.  You may also be able to request that late or partial payments not be reported to the credit bureaus as delinquent during the shutdown to protect your credit score from being adversely affected.  Some institutions may also offer similar accommodations for credit card payments, auto loans and other personal loans.  The important thing is to be proactive and to ASK your lenders/loan servicers to work with you until this government situation is resolved.  Also, make sure you document and confirm your conversations and any understandings from them in writing, by email or certified mail.

    If you have a homeowner’s or flood insurance (or other policies) premium due during this time, these should be priorities for payment in order to maintain your coverage.

    Your AHA is committed to protect and promote sustainable homeownership for all segments of America.  On your behalf, we are contacting Congressional leaders and housing agencies to both urge a quick resolution to the shutdown and to provide guidance to lenders and servicers to minimize the adverse impact on homeowners and aspiring homeowners, respectively.  It does not matter what the political reasons are for the shutdown – America’s homeowners should not be paying the price!

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