As the battle for the current budget continues without resolution, a potential shutdown of many government activities loom if, at least, a temporary funding resolution is not passed by midnight tonight. A shutdown could potentially severely limit the activities of the Federal Housing Authority (FHA), which could impact the issuance of case numbers and slow the processing for HECM loans.
Seeking to find a viable compromise, President Barack Obama has been holding direct meeting with House Speaker John Boehner and Senate Majority Leader Harry Reid. The House of Representatives did pass a stopgap funding bill that would provide funding for an additional week while parties continued to work on finalizing a final bill. However, the President and Democrats opposed the funding measure because it includes $12 billion in cuts and would be the third extension measure of the budget without any real progress in negotiations.
Suggesting the impacts on the FHA by a government shutdown is providing by looking at the last shutdown 1995. During that 21 day period, case numbers on FHA loans could not be obtained. Additionally, endorsement activity and issuance of mortgage insurance certificates were also placed on hold.
The result of shutdown, depending on the length, could lead to significant backlogs for FHA that could take significant time to work through.
However, as debate and rhetoric heat up, it doesn't appear that differences are so far that a deal cannot be struck at the final hour. The political drama is played out as the participants jockey for their positions and sound bites - as they prepare for the fiscal year 2012 budget battle which starts immediately following the resolution of this year's budget.