As the government shutdown drags on, AIG’s mortgage insurer, United Guaranty, is trying to lure borrowers away from Federal Housing Administration insurance with the promise of fewer hold-ups.
“With the current government shutdown and FHA's request of funds to subsidize their capital requirements, we understand there is some confusion about FHA’s continued ability to do business as usual,” United Guaranty said in a statement Monday. “Also, depending on the length of the shutdown, there may ultimately be delays with the closing of your loans.”
Although FHA is operating during the shutdown, it’s doing so with a reduced staff. An FHA official told CNN last week that the agency’s underwriting and approval process would “definitely be slower than normal.”
United Guaranty is attempting to capitalize on that slowdown. The company says it will underwrite any fully documented FHA loan that meets its requirements and will turn around most submissions in 24 hours or less. It’s also temporarily waiving some of its underwriting requirements for furloughed government employees.
United Guaranty was the second-biggest private mortgage insurer in the first half of the year, backing $27.3bn in loans, according to a Bloomberg report. In the same period, $134.8bn in loans were insured by FHA.