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Congress Passes Stopgap Spending Bill to End Government Shutdown

Capitol Building Sunset - Washington DC

6:24 p.m. CST

The House has voted and approved stopgap spending bill to fund the government through February 8. The measure now heads to President Trump's desk for final sign-off.

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4:08 p.m. CST

Several hours after voting to end debate on the stopgap resolution to fund the government through February 8, the Senate passed the resolution along bipartisan lines. The resolution now returns to the House, where it is expected to pass.

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After a weekend spent in intense negotiations, the Senate reconvened Monday morning to try and end the government shutdown that was entering its third day. After much debate, the Senate passed a vote to end debate on the spending resolution, clearing the path for a final vote on the stopgap spending bill, which must then also pass a vote in the House of Representatives. The procedural vote passed 81-18.

Senator Chuck Schumer (D-New York) said of the vote, "In a few hours, the government will reopen. We have a lot to do.”

One of the big sticking points for Senate Democrats was the debate over immigration reform and putting into place protections for the estimated 800,000 so-called "Dreamers," individuals who arrived in the U.S. as undocumented immigrants as children and who now face potential deportation. On Monday morning, Senate Majority Leader Mitch McConnell (R-Kentucky) promised to begin work on an immigration bill and allow an open amendment process if Senate Democrats vote to pass a three-week funding resolution to reopen the government, and if an agreement cannot be reached before the temporary funding resolution runs out on February 8.

“Should these issues not be resolved by the time the funding bill before us expires on February 8, so long as the government remains open, it would be my intention to take up legislation here in the Senate that would address [the Deferred Action for Childhood Arrivals program (DACA)], border security, and related issues as well as disaster relief,” McConnell said. He added that "this immigration debate will have a level playing field at the outset and an amendment process that is fair to all sides."

The resolution also includes an extension for the Children’s Health Insurance Program (CHIP).

As previously reported, the shutdown is likely to affect the industry in three major ways: FHA and VA mortgage loan originations could be impacted due to government workers not being in office; loan applications will be held up if lenders can’t obtain verification of social security numbers; and mortgage firms won’t be able to process loans if the IRS is not available to verify borrowers’ tax returns, effectively creating a backlog when the government eventually re-opens.

"It's going to take a little longer to get those loans funded," Kelly Decker with First United Bank Mortgage told NBC, referencing lenders not being able to obtain IRS data due to the shutdown. "[If the homebuyer] had planned on moving trucks showing up on the last day of the month, it might mean they have to wait maybe another three, four, five days, depending on how long the shutdown takes," Decker said.

As companies brace themselves for what a prolonged shutdown could mean, Ginnie Mae announced on Sunday that its operations will continue despite the shutdown. In a press statement the Ginnie Mae insured investors that:

During a lapse in government funding, Ginnie Mae will reduce staffing to essential personnel levels. Importantly, Ginnie Mae will continue to remit timely payment of principal and interest to investors. There will also be no disruption of essential functions like the granting of commitment authority and support for continued issuance of Ginnie Mae-guaranteed Mortgage Backed Securities (MBS) and REMICs.

Many are looking to the 2013 shutdown for guidance. But the fundamental changes to the industry in the past five years may mean we are in unknown territory. To learn the full impacts of a prolonged shutdown, the 2013 shutdown, which lasted 16 days, can be a guide, however other changes in the market will impact the total cost of the current shutdown.

“In the past decade, government involvement in the housing industry has precipitously increased, hastening an even greater dependence on the federal institutions that would be affected by a potential government shutdown," said Five Star Institute President and CEO Ed Delgado. "I call on all congressional stakeholders to stop using the needs of American homeowners as leverage for achieving their policy goals."

About Author: David Wharton

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