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FHA INFO #13-63
Distribution Date:
October 4, 2013
As
a result of the government shutdown, FHA Single Family has received several
questions regarding our operating plans which we have clarified in the
following Q&As. These Q&As have been added to the Frequently
Asked Questions database accessible through the FHA Resource Center.
We
greatly regret the inconvenience that this shutdown has caused, but hope the
following is helpful during this time.
Q:
Can
I get an FHA case number?
A: Yes.
Lenders will be able to obtain an FHA case number from the FHA Connection.
Q: Will FHA
endorse single family loans during a shutdown?
A: FHA will
be able to endorse single family loans, with the exception of Home Equity
Conversion Mortgages (HECM) and Title I loans, during the shutdown. A limited
number of FHA staff will be available to endorse new loans. Due to limited
staff, the time to endorse the cases may be extended.
Q: Will FHA
still be able to endorse my loan if I am not able to obtain tax returns
verified by the IRS during the shutdown?
A: FHA is
aware that some lenders obtain tax transcripts directly from the IRS for use in
underwriting their FHA-insured loans. These lenders may be unable to
actually obtain any returns directly from the IRS for the duration of the
Government shutdown.
Lenders may
continue originating loans using FHA’s existing underwriting requirements,
which have not changed as a result of the shutdown. Lenders are required
to obtain tax returns from certain borrowers in order to originate FHA-insured
loans and lenders must also continue to obtain the borrower’s signed
authorization (i.e., Forms IRS 4506, IRS 8821, or whatever form or electronic
retrieval service is appropriate) for any loan for which the borrower's tax
returns are required.
Q: Why
didn’t the borrower’s name and Social Security Number pass validation with the
Social Security Administration?
A: When the
lender requests the FHA case number, the borrower’s name, date of birth and
Social Security Number (SSN) and property address are entered into FHA
Connection (FHAC). If the overnight matching process with Social Security
Administrations (SSA) fails, a Case Warning for SSN Validation will be placed
on the case number. The failure could occur because the data doesn’t
match or because the system went offline due to the government shutdown.
SSA has limited tolerance for minor mistakes in names, birth dates and social
security numbers, so lenders are reminded of the importance for accuracy in
these three data elements when requesting a case number.
Q: Can the
Social Security Number validation be run again?
A: Lenders
do have the opportunity to make the necessary corrections and a second attempt
to validate with SSA will occur. Any changes made to the borrower's name,
birth date and SSN at any time prior to insurance endorsement will trigger a
validation request with SSA. If the revised data passes validation, the
Case Warning for SSN Validation will be removed.
If the failure
was caused by the government shutdown, the Case Warning for SSN Validation will
not be able to be removed until the government reopens. FHA will ensure
that the validation process takes place and lenders will be advised of the
results in FHAC as soon as possible upon the reopening of the government.
Q: Can I
continue to process the loan without the Social Security Number validation?
A: Lenders
may continue processing loans without receiving validation of the borrower’s
name and SSN, but FHA will not endorse loans without this validation. For
the Lender Insurance program, lenders will not be able to insure the loans for
which this validation has not been received.
Q: What
happens if I cannot validate the borrower’s SSN?
A: The lender may
submit a request for insurance endorsement if confident that the Case Warning
was received in error as a result of a system shutdown. The lender must
provide conclusive documentation to verify the SSN such as a valid SSN card
issued by the SSA, or an original document issued by a federal or state
government agency, which contains the name of the individual and the SSN of the
individual, along with other identifying information of the individual in the
case binder to support the validity of the borrower’s name and SSN to the
applicable Homeownership Center (HOC).
Lenders may not
endorse any loans with Case Warnings for SSN Validation and FHA will require
the lender to submit the case binder for endorsement along with conclusive
documentation to verify the SSN such as a valid SSN card issued by the SSA, or
an original document issued by a federal or state government agency, which
contains the name of the individual and the SSN of the individual, along with
other identifying information of the individual in the case binder to support
the validity of the borrower’s name and SSN to the applicable Homeownership
Center (HOC).
If upon review,
FHA believes the documentation provided complies with HUD’s regulations and the
loan meets all other FHA requirements, the HOC will endorse the mortgage for
insurance.
FHA Homeownership List Serv
Archive Page
FHA Recently began posting prior
messages from this Homeownership List Serv on a Departmental web site.
Currently the archives include messages from calendar year 2013 and a portion
of calendar year 2012. To view messages sent by fhainfo@hud.gov
and previously by jerrold.mayer@hud.gov,
please visit the following site: http://bit.ly/FHAInfo
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