"The Federal Housing Administration (FHA) said Wednesday it will continue processing claims during the government shutdown but cannot endorse new Home Equity Conversion Mortgages (HECMs) until funding is restored. That information was confirmed by the National Reverse Mortgage Lenders Association (NRMLA). Because most reverse mortgages fall under the FHA's HECM program, FHA loan endorsements stop as soon as funding lapses."
"U.S. Department of Housing and Urban Developments (HUD) contingency plan for a lapse in appropriations, updated on Sept. 29, outlined HECM protocol: The Office of Single Family Housing will endorse loans, with the exception of HomeEquity Conversion Mortgages (HECM) and Title I loans, under current multi-yearloan guarantee commitment authority in order to support the health and stability of the U.S. mortgage market, the plan reads."
"Bill Packer, chief operating officer of Longbridge Financial, siad the pause in FHA endorsements and the temporary delay in flood insurance policies will not affect the company's ability to serve borrowers. We're focused on educating our customers and partners about what this means, while reinforcing the alternatives available beyond FHA loans, Packer said. Our proprietary Platinum suite and the first-ever HELOC For Seniors provide innovative options that aren't dependent on government funding. Our priority is ensuring customers have dependable choices and peace of mind,"
The government shutdown halts endorsement of new Home Equity Conversion Mortgages (HECMs) while the FHA will continue processing claims. HUD's contingency plan allows endorsement of most single-family loans but excludes HECMs and Title I loans during the lapse in appropriations. HUD confirmed borrowers will continue to receive HECM payments from HUD during the funding lapse. Some lenders report operational continuity and are promoting non-FHA alternatives such as proprietary reverse products and HELOCs for seniors. The shutdown may delay Social Security services and federally backed mortgages, and prolonged closures can harm housing, economic recovery, and investor confidence.
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