Home Buying in Portland>Question Details

Jonathan and…, Home Buyer in Portland, OR

Are there any VA lenders who do not apply an overlay requiring clear CAIVRS, and could work fast?

Asked by Jonathan and Anne, Portland, OR Fri May 3, 2013

We are a very well qualified family in all other respects: High income, high credit, low DTI. We have a VA appraisal completed which can be transferred, and an electronic loan file ready for upload.

Five days away from closing, our lender discovered that they have a no-CAIVRS overlay. Very unfortunate they did not disclose this at the beginning of the process. We did ask them about CAIVRS up-front, but they must have misunderstood it.

I had a shortsale in 2011 on an FHA property I bought in grad school, which turned into a money-loosing rental I could not support at that time. I purchased at the top of the market in 2006 and never had a chance to sell above full loan value.

I have full documentation of the situation. The shortsale occurred through the FHA pre-foreclosure process, and was very clean. The government paid a small claim to BOA and will not seek any payment or judgement against me. I have full documentation, including neighborhood watch screens from HUD.

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Answers

7
George Raymondo’s answer
Boy! I have written about this very subject a least a dozen or so times and warned homeowners considering a short sale to weigh ALL the facts and the ramifications especially when it concerns defaulting on any FHA, VA or USDA loan. Since I am considered one of the a leading authorities on "Purchasing After a Short Sale", I can assure you...You will NOT get financed on a new FHA, VA or USDA loan. In the old days, if you lost your home in foreclosure or did a short sale, you could actually contact HUD and request a pay back and release of your CAIVRS Claim. But that's no longer an option. Why? Simple! Choices. The American Voting Public has spoken. The HUD Secretary who governs FHA has spoken. And who elects the HUD Secretary? Yep, you got it! The President.

So what can be done? For now nothing and if I were you I would be really mad that your Loan Officer was such a Rookie that he or she didn't heed your warning about having defaulted on a previous FHA. That in my mind is the caliber of LOs out there since the Safe Act and the Dodd-Frank Act passed. Many of the old dogs just got tired and left the business due to the FEDs over regulation of this industry. Having said that, I am afraid you'll need to sit on the sidelines and wait the full 2 years and put down 20%, or wait 3 years and put up down 10%, or wait 4 years and you're back at 3-5% down. Sorry my friend, but I have yet to see a single borrower find a lender who could overlook a Federal Credit Alert System Warning...commonly known as...CAIVRS.

Best of Luck!
0 votes Thank Flag Link Sat May 4, 2013
Sorry bud, but you are misinformed and should not be answering people's questions with this mis-guided info. Please see the 'best answer' and our followup.
Flag Wed May 15, 2013
BEST ANSWER
Try Creekside Mortgage, Kerry Greenwakl 360-571-5626 they specialize in VA and I believe over 80% of the loans they do are that.
1 vote Thank Flag Link Fri May 3, 2013
Kerry and his assistant, Elisa, ran us through in record time - Initial contact to funding on a VA loan WITH a CAIVRs hit in 9 business days. Great recommendation!
Flag Wed May 15, 2013
Thanks John, I've got Elisa, Kerry's Processor, looking into our question now.
Flag Fri May 3, 2013
This is not an overlay of the lender it is a requirement of the VA, just as it would be with any other Federally backed loan, including FHA and USDA Rural.

Per the VA lenders handbook:

"CAIVRS is a Department of Housing and Urban Development (HUD) maintained computer information system which enables participating lenders to learn when an applicant has previously defaulted on a federally-assisted loan.

The database includes default information from the Department of Agriculture, Department of Education, Department of Justice, HUD, Small Business Administration, Federal Deposit Insurance Corporation, and VA.

The VA default information included in the database relates to:

• overpayments on education cases,
• overpayments on disability benefits income, and
• claims paid due to home loan foreclosures.
...

An applicant cannot be considered a satisfactory credit risk if he or she is presently delinquent or in default on any debt to the Federal Government until the delinquent account has been brought current or satisfactory arrangements have been made between the applicant and the Federal agency."

Simply put if you caused a loss to the Feds they will not consider you credit worthy. Not to mention the risk the new lender has as they would soon have a prioritized lien against their collateral.

The FHA short should fall off in 38 months but something like a student loan must be consolidated (try William D Ford Foundation) or rehabilitated directly with the servicer (this takes 6 months). You may contact HUD and see about paying back the claim perhaps but I am not certain. Other items such as taxes or other liens would require them to be paid before they would no longer report.
1 vote Thank Flag Link Fri May 3, 2013
Sorry Corri, but this statement is incorrect: "This is not an overlay of the lender it is a requirement of the VA, just as it would be with any other Federally backed loan, including FHA and USDA Rural. "

The VA Handbook you quoted only requires that a lender CONSIDER what a CAIVRs report might mean, and research, obtain letters from the borrow, etc about what happened. It DOES NOT proclude a lender from choosing to issue a VA-guarenteed loan. You just have to have the right lender in your network. See my 'best answer' and followup for details on who has such a lender in their network.
Flag Wed May 15, 2013
What month was the shortsale in 2011? Academy Mortgage does do VA loans and we are a local private independent lender.
0 votes Thank Flag Link Fri May 3, 2013
Thanks Sandra. We just missed you but would reach out if we wrere up against this again.
Flag Wed May 15, 2013
I am a lender and have done VA loans for many years, if your still looking my office number 503-210-4256.
0 votes Thank Flag Link Fri May 3, 2013
I can recommend Todd Hing at Mortgage Express - 503-520-1141
We just closed a VA transaction. Call me if you have any questions.
Tomas Navarro 503-317-8299
0 votes Thank Flag Link Fri May 3, 2013
OK I have never heard of CAIVRS so unelss you can tell me what that is = I cant help. I have been doing real estate transactions over 20 plus years and learn something new everyday!
0 votes Thank Flag Link Fri May 3, 2013
CAIVRS is a kind of like a credit report for federally insured debts. Let's say you failed to pay a federal student loan, or in my case, had a shortsale on an FHA loan. In those cases, you get entered into CAIVRS by the respective agencies, either when in default, or when the agency pays a claim on your behalf.

Most lenders perform a CAIVRS check as a standard underwriting rule within their organization...and the check is required for new FHA financing. For something like the FHA situation described the entry is purely an administrative thing, and falls off after 3 years. No payment is due. In the case of student or SBA loans, the situation -may- be different.

CAIVRS is operated by HUD. FHA's Asset Recovery Division in Albany, NY maintains all non-FHA/SFH records. FHA Resource Center controls access the FHA/SFH records, and acts as an intermediary between the borrowing public and the FHA SFH CAIVRS team.

More info at:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/
Flag Fri May 3, 2013
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