The Department of Housing and Urban Development (HUD) released a contingency plan if budget negotiations held today fall and the government shuts down, which mortgage market participants are sure will happen.
For the entire copy of the HUD's contingency plan, please click this link.
According to the plan, the HUD should have four hours to complete the expected shutdown. Of the government agency's 9,700 employees, 846 would continue to work.The HUD said it expects a number of employees to be called in on an intermittent basis to work just on excepted activities.
In terms of Ginnie Mae, the agency can still issue MBS and structured multi-class deals even in the event of a shutdown. The HUD said that if a government shutdown happens, Ginnie Mae may continue operations. However, the government agency will limit its operations to functions that are necessary to avoid disruption to its ability to fulfill its obligations.
Additionally, the Office of Single Family Housing in the event of a shutdown will not be endorsing new loans. Only operations that are needed to maintain the Federal Housing Administration’s existing portfolio such as maintenance issues that relate to the health and safety of REO inventory will be performed.