Government shutdowns aren't good for anyone and that is particularly true for Reverse Mortgages. With another possible government shutdown looming over everyone, Reverse Mortgage Daily highlighted possible effects that it could have on the business.
The report states that a shutdown could impact the way brokers and originators conduct business.
"That’s because unlike pretty much all other Federal Housing Administration loan activity, Home Equity Conversion Mortgage endorsements would come to a complete halt if the government were to shut down," according to Reverse Mortgage Daily.
"According to an FHA resource compiledduring the last federal government stoppage back in 2013, the FHA can continue to endorse single-family loans, with the caveat that the process may take longer with substantially reduced staffing levels."
In addition to these effects, the article also states that during a shutdown, "the FHA does not have the authority to insure additional HECMs" in correspondents with the statutory cap limiting the number of reverse mortgages within the program.
For additional information on the possible effects on Reverse Mortgages due to a government shutdown, click on the image above.