The Federal Housing Administration urged lenders to be sensitive to borrowers feeling the negative effects of the government shutdown. With no paychecks coming in, some federal employees may be unable to make their mortgage payments, the FHA noted.

The agency expects all approved lenders to communicate with distressed borrowers, offering them rescue plans such as informal forbearance plans and available loss mitigation options.

"These dedicated public servants, through no fault of their own, are now forced to find a way to meet their ongoing financial obligations without their usual salaries," said FHA Commissioner Carol Galante in a letter to FHA-approved lenders.

She added, "In many instances these are the same employees who have already lost pay during recent sequestration related furloughs."

Additionally, the regulator is strongly encouraging all lenders to waive late fees for impacted borrowers and to suspend credit reporting on those who are affected by the shutdown. 

"FHA is working to ensure that the hard won improvement in the housing market is not substantially compromised by the government shutdown and, in particular, that responsible FHA borrowers impacted by the shut-down receive the support they need," Galante concluded.

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