8. Using CAIVRS to Determine Eilgibility for FHA-Insured Mortgage Transactions

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Introduction

This topic contains information on using CAIVRS to determine a borrower's eligibility for an FHA-insured mortgage transaction, including

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a description of CAIVRS

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lender responsibility for borrower screening using CAIVRS

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documenting CAIVRS authorization

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accessing CAIVRS

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exceptions to the eligibility rule

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handling incorrect CAIVRS information, and

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lender responsibility for resolving conflicting information.

Change Date

May 10, 2009

4155.1 4.A.8.a Description of CAIVRS

HUD's CAIVRS is a Federal government-wide repository of information on

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those individuals with delinquent or defaulted Federal debt, and

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those for whom a payment of an insurance claim has occurred.

4155.1 4.A.8.b Lender Responsibility for Borrower Screening Using CAIVRS

Lenders must use CAIVRS to screen all borrowers (except those involved in a streamline refinance), including nonprofit agencies acting as borrowers. The borrower is not eligible for Federally-related credit, if CAIVRS indicates that he/she

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is presently delinquent on a Federal debt, or

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has had a claim paid within the previous three years on a loan made and insured on his/her behalf by HUD.

Exception: Certain exceptions to this eligibility rule exist, and are described in HUD 4155.1 4.A.8.e.

4155.1 4.A.8.c Documenting CAIVRS Authorization

Lenders must write the CAIVRS authorization code for each borrower on the HUD-92900-LT.

4155.1 4.A.8.d Obtaining Internet Access to CAIVRS

The table below contains guidelines for FHA-approved lenders to use in order to access CAIVRS via the Internet.

Note: As of October 1, 2008, HUD discontinued telephone access to CAIVRS.

If the lender's staff …

Then …

currently have FHA Connection User IDs

they should request that their FHA Connection Application Coordinator update their FHA Connection profile to include CAIVRS.

does not have FHA Connection User IDs

they should

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access the FHA Connection at https://entp.hud.gov/clas/index.cfm, and

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select Registering to Use the FHA Connection to request a User ID and access to CAIVRS.

Access by Non-FHA Participating Agency Lenders: Non-FHA lender staff should

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request access from HUD's Internet site at https://entp.hud.gov/caivrs/public/home.html

 

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select “Registering Lender User ID” from the main menu, and�

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request at least one Application Coordinator User ID, as well as a Standard User ID for each individual user.

4155.1 4.A.8.e Exceptions to the Eligibility Rule

The table below describes exceptions to the eligibility rule for an FHA insured mortgage, using CAIVRS.

Exception

Description

Legal Assumptions

The borrower is eligible for an FHA-insured mortgage if he/she sold the property, with or without a release of liability, to an individual who subsequently defaulted.
 
The borrower must prove that the loan was current at the time of the assumption.

Divorce

The borrower may be eligible for an FHA-insured mortgage if the divorce decree or legal separation agreement awarded the property and responsibility for payment to the former spouse.
 
The borrower is not eligible if a claim was paid on a mortgage in default prior to the divorce.

Bankruptcy

The borrower maybe eligible for an FHA-insured mortgage if

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the property was included in a bankruptcy caused by circumstances beyond the borrower's control, such as the

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the death of the principal wage earner, or

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a serious long-term uninsured illness, and

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the borrower meets the requirements described in

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HUD 4155.1 4.C.2.g for Chapter 7 bankruptcy, and

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HUD 4155.1 4.C.2.h for Chapter 13 bankruptcy.

Seller Who Is Selling Principal Residence

A mortgage loan is generally not eligible for insurance if any party to the transaction is on either the

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HUD Limited Denial of Participation (LDP) list, or

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General Services Administration's (GSA's) "List of Parties Excluded from Federal Procurement or Nonprocurement Programs,”

However, an exception exists for a seller on the list who is selling his/her principal residence.

Disaster Victims (in Presidentially-Declared Disaster Areas)

For information on the eligibility of disaster victims, see HUD 4155.1 6.A.6j.

IMPORTANT: FHA does not require a clear CAIVRS authorization number as a condition for mortgage endorsement. However, the lender must document and justify mortgage approval based on these exceptions.

4155.1 4.A.8.f Handling Incorrect CAIVRS Information

FHA may delete erroneous CAIVRS information falsely indicating that a borrower has defaulted on a FHA mortgage, such as incorrect social security number reporting. However, FHA will not

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remove correct CAIVRS information, even if the borrower is judged eligible for Federally-related credit, or

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alter or delete CAIVRS information reported from other Federal agencies, such as the

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Department of Education, or

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Department of Veterans Affairs.

The borrower and/or lender must contact those Federal agencies directly to correct or remove erroneous or outdated information.

4155.1 4.A.8.g Lender Responsibility for Resolving Conflicting Information

Lenders may not rely on a clear CAIVRS approval when there is independent evidence of conflicting delinquent Federal obligations. The lenders must

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document the resolution of any conflicting information, and

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contact the appropriate HOC for instructions or documentation to support the borrower's eligibility if

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the CAIVRS message seems erroneous, or

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the date of claim payment needs to be established.

The HOC may provide lenders with

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information about

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when the three-year waiting period will elapse

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erroneous social security numbers, and

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instructions on processing requirements for other-HUD related defaults and claims, such as Title I loans.