www.hudclips.org 


U. S. Department of Housing and Urban Development
Washington, D.C. 20410-8000

November 22, 1995
 
MORTGAGEE LETTER 95-55
 
TO:  ALL APPROVED MORTGAGEES
 
SUBJECT:   Single Family Loan Production - FHA Insured Mortgages
           Originated and/or Closed During the
           Government Shutdown
 
     The recent temporary shutdown of most Federal government
offices resulted in a number of questions posed by mortgage
bankers, real estate agents, and other involved in the mortgage
finance industry.  Summarized below are our replies to the
questions received by the Federal Housing Administration
regarding the shutdown of November 14-19, 1995.
 
1.   Is it necessary for a lender to obtain a case number to
     start processing a FHA-insured mortgage?
 
     No, but the lender should obtain a case number as soon as
     possible.  A mortgage originated before a case number is
     assigned does not invalidate the eventual assignment of the
     case number or the appraisal (assuming the appraiser is
     eligible to make appraisals for FHA mortgage insurance
     purposes).  Further, it is not necessary to have a case
     number to close a mortgage but obviously a valid case number
     must have been obtained before the loan can be submitted for
     insurance.
 
2.   May the lender close the mortgage without obtaining a Credit
     Alert Interactive Voice Response System (CAIVRS)
     authorization number?
 
     Yes, but the lender does so at its own risk.  If it is
     eventually determined that the borrower is not eligible due
     to information reported through CAIVRS, then the mortgage
     will not be endorsed.  Lenders should check CAIVRS at their
     earliest convenience.
 
3.   If the lender is unable to transmit the Upfront MIP during
     the 15-day window, will there be a late fee imposed?
 
     No, the Department has determined that mortgages closed
     around the period of the shutdown will not incur a late fee
     if the Upfront MIP is received within 25 days of closing.
     However, this ten-day extension only applies to mortgages
     closed during November of this year.
 
4.   Will the shutdown result in a delay in obtaining the
     Mortgage Insurance Certificate?
 
     We have directed our local offices to allocate staff
     resources to ensure that  backlogs in issuing endorsements
     resulting from the shutdown are kept to a minimum.
 
5.   Is FHA extending the 60-day endorsement submission
     requirement?
 
     No, we do not believe it necessary to extend the 60-day
     endorsement submission requirement.  However, we have
     advised our local offices to be flexible if it has any
     reason to believe that a particular loan file was submitted
     late due to the shutdown when determining whether the
     mortgage is eligible for endorsement as submitted or if a
     payment history is required.
 
     If you have any questions concerning the contents of this
mortgagee letter, please contact your local HUD Office.
 
Sincerely yours,

Nicolas P. Retsinas
Assistant Secretary for Housing-
Federal Housing Commissioner
.