The midnight hour came and went as Congress battled back and forth and Americans will wake up Tuesday morning to many of its previously offered governmental services shut down or cut back. Our elected officials will resume talks at 9:30 a.m. EST to try to hammer out their issues and come to a resolution and end the first government shutdown in 17 years as it began at 12:01 EST.
With Obamacare at the heart of the matter, federal employees who are considered essential will continue to work. However, for the 800,000-plus deemed “non-essential,” they will be faced with furloughs, unsure of just when they will be able to work or be paid again. Most are expected to be out of their offices within four hours of the start of business Tuesday morning, Oct. 1.
“The shutdown isn’t going to help the U.S. economy continue to grow and interest rates across the board could very well increase, depending on what the bond market does during this time," said Don Frommeyer, president of NAMB—The Association of Mortgage Professionals.
"Let us resolve our differences," said House Speaker John Boehner (R-OH). "The House has voted to keep the government open, but we also want basic fairness for all Americans under Obamacare."
The U.S. Department of Housing & Urban Development (HUD) lists a current staff of 8,709. During the shutdown, only 349 of those employees are deemed "essential," as 8,360 will be furloughed. In a document issued Sept. 27, HUD indicated that the FHA will be able to endorse single-family loans during the shutdown. However, only a limited number of FHA staff will be available to underwrite and approve new loans so the process will take longer. Most loss mitigation for homeowners facing foreclosure (including FHA loan modifications, FHA-HAMP, etc.) will continue. The FHA will also not approve any lender applications during the shutdown. Last week, HUD issued a Contingency Plan detailing ways the Department will deal with the shutdown.
USDA-Rural Development currently employs 4,730, and only a mere 53 will be kept on during the furlough, leaving a total of 4,677 out in the cold. There are certain limited activities conducted by USDA-Rural Development for the purpose of preserving the government’s property. This property includes Rural Development’s loan portfolio, which currently exceeds $190 billion and serves as collateral for loans and borrowers’ funds paid to Rural Development in escrow for real estate taxes and property insurance.
One of the largest government sectors, the U.S. Department of Veterans Affairs (VA) employs 332,025 total. Of that number, only a small portion (14,224) are expected to be furloughed. The reason for so many VA employees being kept on is that most are funded through multi-year and other types of appropriations.
Of the U.S. Department of Justice's 114,486 total workforce, 17,742 are expected to be furloughed, while 96,744 are considered "essential." The majority of workers at the FBI, ATF, the DEA and other agencies within the Department of Justice would report to work. However, U.S. Attorneys would curtail a good portion of civil litigation and the U.S. Antitrust division would not prepare any new proceedings.
The Financial Crimes Enforcement Network's (FinCEN) job is to safeguard the financial system from illicit use and combat money laundering, such as mortgage fraud and cyber fraud. Of the Network's 345 total employees, only 30 will be kept on and the remaining 315 will be furloughed. The Network will continue computer operations to prevent the loss of data and maintaining minimal telecommunications.
A total of 8,752 of the workforce at the Internal Revenue Service (IRS) will be kept on. Employing 94,516 total, a whopping 85,764 would fall victim to the furlough. Impacted by this situation are all of the IRS's audit functions; examination of returns and processing of non-electronic tax returns that do not include remittances; non-automated collections; legal counsel; taxpayer services, such as responding to taxpayer questions (call sites); information systems functions (except as necessary to prevent loss of data in process); and all planning, research and training and development activities.
One office not impacted will be the employees at the offices of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP). Its 193 employees will maintain business as usual, continuing oversight for the 2008 Wall Street bailout. SIGTARP is financed by multi-year appropriations and is essentially exempted from a shutdown.
The Social Security Administration's 62,343-strong workforce will see 18,006 of its employees furloughed. The 44,337 who will continue to work will provide services such as verification of mortgage borrowers’ Social Security Numbers.
The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) are funded outside of the appropriations process, so these agencies will continue to function. The Consumer Financial Protection Bureau (CFPB) is funded through the annual appropriations process and will not be impacted by the shutdown.
And as Congress squares off on these issues, are they really in a big hurry to take action and get these 800,000-plus back into the workforce? It turns out Congressional members are safe from the furlough, as the 533 current members of Congress will continue to be paid, protected by the 27th Amendment which prevents any Congress from changing its own pay.
"The idea of putting the American people's hard-earned progress at risk is the height of irresponsibility, and it doesn't have to happen," said President Barack Obama. "Let me repeat this. It does not have to happen."
- Vice President of Lending - Essential Federal Credit Union - Baton Rouge, LA
- Senior Vice President of Lending - Cherokee Strip Credit Union - Ponca City, OK
- Director of Community & Homeowner Engagement - Habitat for Humanity of Greenville County - Greenville
- Mortgage Consultant (SAFE) - Wells Fargo - Milwaukee, WI
- Consumer Lending Specialist II - Inspirus Credit Union - Tukwila or Lynnwood, WA
- Mortgage Loan Originator - Bank SNB - San Antonio, TX