The end of the longest shutdown in the history of the nation is finally in sight with President Trump announcing on Friday that he had agreed to reopen the federal government for three weeks. During this time, he said that negotiations on the border wall would continue with the Congress. "I am very proud to announce today, that we have reached a deal to end the shutdown and reopen the federal government," Trump said. "As everyone knows I have a very powerful alternative but I didn't want to use it at this time. Hopefully, it will be unnecessary."
Trump said that if the Republicans and Democrats could not reach an agreement on the wall funding by the February deadline, he was ready to renew the confrontation or declare a national emergency to bypass Congress altogether. Thanking the 800,000 federal workers, many of who worked for federal agencies like the Department of Housing and Urban Development, who have been on furlough or are working without pay during the shutdown, Trump said that these workers were "incredible patriots."
According to The New York Times, the President's announcement "paved the way for Congress to quickly pass Spending Bills that Trump would sign to restore normal operations at a series of federal agencies until February 15 and begin paying the federal workers who have been furloughed. The plan does not include money for the wall that the President and demanded initially.
One of the many federal agencies that have been affected by the shutdown in the Department of Housing and Urban Development (HUD), which recently issued guidelines on what lenders and borrowers could do to address their concerns. The guidelines, in the form of frequently asked questions (FAQ), give lenders and servicers a sense of the business they could and couldn't do with HUD during the shutdown. They include questions on the departments that would be open, submitting FHA mortgage insurance premiums, submitting loans for approvals as well as packages for condo approvals, payments to borrowers, FHA monitoring, and guidelines related to REO/HUD home sales.
Speaking to NPR at an annual Point-In-Time headcount survey in Washington, D.C. on Thursday, HUD Secretary Dr. Ben Carson had said that the longer the shutdown goes, the harder it would be on federal employees. "These federal workers, I mean, yes I know we're going to give them back pay, but that doesn't take care of the interest if they borrow money," Carson said.
Around 95 percent of HUD employees have been furloughed and those who have been called back to work without pay were "working around the clock" to make sure Americans who rely on HUD for housing assistance don't get evicted, Carson told NPR.
The end of the shutdown, even if it seems to be temporary is likely to give much relief not only to federal workers but also to tenants who were housed through HUD and landlords who work with the agency to provide housing to low-income households.
The shutdown had already started affecting those housed through HUD, as well as independent landlords who were working with government employees unable to pay their rent. While none of the 1,175 rental contracts that were not renewed by HUD due to the shutdown were likely to affect low-income tenants, according to the National Housing Conference (NHC), this could have changed if the shutdown extended past February. NHC said that HUD staff was working with landlords across the country to ensure this does not happen. Additionally, contracts were being paid with available funds, and landlords were being told to use their reserves to cover operating expenses.
Taking Steps to Help Borrowers
A number of financial institutions including the GSEs stepped up their efforts to provide relief to borrowers during the shutdown.
Fannie Mae and Freddie Mac issued an additional set of guidelines for lenders to help them assist borrowers, especially federal workers, whose income was affected by the government shutdown. In a joint letter to lenders, the government-sponsored enterprises (GSEs) said that with the shutdown extending for a longer than anticipated time, they were "concerned about the impact that continued income interruption may have on borrowers' ability to meet their mortgage payment and other monthly obligations."
The Federal Housing Administration (FHA) has also called on all approved mortgagees and lenders to assist federal workers and contractors impacted by the shutdown. “In accordance with its longstanding policy, FHA expects mortgagees to assist borrowers experiencing a loss of income to the greatest extent possible by extending special forbearance plans to borrowers impacted by the shutdown, and fully evaluating borrowers for available loss mitigation options to avoid foreclosure whenever possible,” FHA Commissioner Brian Montgomery said.
Bank of America reached out to clients who may be impacted by the partial federal government shutdown to make them aware of its Client Assistance program.
“We know the partial federal government shutdown is affecting many of our clients, and we want them to know that we are here to help,” said Aron Levine, Head of Consumer Banking, Bank of America. “Our Client Assistance Program is available to individuals affected by the shutdown for personalized financial assistance, tailored to their specific situation and financial needs.”
Chase has also offered hardship programs to customers who have been affected by financial strain, unemployment, or natural disasters. The bank has said that it will automatically waive or refund overdraft and monthly service fees on Chase checking and savings accounts if an employee’s salary from an affected federal agency was direct-deposited into the account in November 2018.
“We’re here for our government worker customers whose pay may be disrupted,” said Thasunda Duckett, CEO of Consumer Banking at Chase. “We all hope this will be resolved soon.”
Congresswoman Maxine Waters (D-California), Chairwoman of the House Financial Services Committee sent a letter to the heads of the Federal Reserve, Federal Deposit Insurance Corporation, Consumer Financial Protection Bureau, Office of the Comptroller of the Currency, and National Credit Union Administration, urging them to consider the needs of consumers who may be experiencing temporary financial hardship in meeting credit obligations as a result of the shutdown.
“This is important to ensure that customers can meet loan payments and avoid high fees and other penalties that they may otherwise incur,” Waters wrote in her letter. “Through no fault of their own, some affected federal employees and others, such as federal contractors, may be unable to pay all their bills on time because of the shutdown.”