Federal Government Shutdown Does Not Impact Freddie Mac Operations
October 1, 2013
Freddie Mac will continue normal operations without interruption during the temporary federal government shutdown. Freddie Mac systems and business functions will be open as usual for all selling and servicing functions.
While Freddie Mac currently is in conservatorship and regulated by the Federal Housing Finance Agency, we are not a government agency and are not funded through the Congressional appropriations process so a government shutdown will have no direct impact on us.
You may have borrowers who are impacted by the government shutdown and if so, they will be eligible for all our relief options stated in the Freddie Mac Single-Family Seller/Servicer Guide (Guide).
If a loan is made to a government employee and the closing date is during the shutdown period, you do not need to obtain employment verification or re-verification prior to closing if a government office providing the verification is not able to do so as a result of the temporary shutdown. You are also not required to obtain employment verification or re-verification for such loans after the shutdown ends. This exception does not apply to income verification or any other requirements. We ask that you continue to be diligent in your underwriting practices as you remain bound by the representations and warranties as stated in the Guide.
If you have concerns about needing an executed IRS Form 4506-T, Request for Transcript of Tax Return, please note the following guidance:
- We only require IRS Form 4506-T to be signed by the borrower prior to closing. We do not require that 4506-T be processed by IRS prior to closing. However, we require that the actual 4506-T information is obtained as part of the Seller's in-house QC program.
- We require Servicers to have the Form 4506-T or 4506T-EZ, as applicable, processed by the IRS prior to evaluating a borrower for HAMP, a standard modification or other workout option if processing of these forms is required. In the event the Servicer is unable to obtain tax transcripts from the IRS through electronic processing of an executed Form 4506-T or 4506T-EZ, Servicers must obtain a copy of the tax return from the borrower, if required.
Servicers of Federal Housing Administration (FHA), Department of Veterans Affairs (VA), and Rural Housing Service (RHS) mortgages should look to the requirements issued by those government agencies during the temporary shutdown.
We will inform you immediately if there are changes to our business operations as a result of the temporary shutdown.
If you have questions, please contact your Freddie Mac representative.