The Federal Housing Administration (FHA) is calling on its approved lenders and mortgagees to be sensitive to the financial hardships faced by borrowers as a result of the government shutdown.
This includes borrowers subject to furlough, layoff, or a reduction in income related to the shutdown.
"These dedicated public servants, through no fault of their own, are now forced to find a way to meet their ongoing financial obligations without their usual salaries," said FHA Commissioner Carol Galante in an Oct. 11 letter to FHA-approved lenders and mortgagees. "In many instances these are the same employees who have already lost pay during recent sequestration related furloughs."
FHA expects all approved mortgagees and lenders to make every effort to communicate with and assist affected borrowers to the greatest extent possible by:
- Extending informal forbearance plans to borrowers facing financial hardship as a result of the shutdown, and
- Fully evaluating borrowers for available loss mitigation options to avoid foreclosure whenever possible.
FHA is also strongly encouraging all approved mortgagees and lenders to waive late fees for affected borrowers and to suspend credit reporting on borrowers nationwide who have been affected by the shutdown.
"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 shutdown receive the support they need," Galante added.
FHA joins Fannie Mae, Freddie Mac, and Veterans Affairs in urging lenders to take action to protect those federal workers impacted by the shutdown.