FHA Mortgage Guidelines:  For the Professional

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FHA: CAIVRS, LDP, and GSA

CAIVRS (Credit Alert Interactive Voice Response System):

The Social Security number and birth-date for each Borrower must be run through the Federal Computer system which searches for Federally-funded delinquencies by SSAN. There are six (6) governmental agencies that report delinquencies/defaults to this federal computerized tracking system (Dept. of Ed., FHA, VA Education and GI (mortgage) Loans, Rural Housing Admin., Small Business Admin., and the Dept. of Justice (Civil Levies).

Any reported default (i.e., any finding other than “A” for Acceptable) from these 6 agencies will be listed on the search report. Included in the search results will be an agency phone number listed for further action and resolution on the part of the Borrower.

The Lender is responsible for obtaining the final resolution of this claim from the Borrower prior to closing. The Borrower must pay off the delinquency or make satisfactory repayment arrangement with the agency reporting the default. NOTE: FHA cannot alter or delete the CAIVRS information from federal agencies other than itself.

A copy of the CAIVRS printout must be retained in the loan file.

Limited Denials of Participation (LDP) and GSA (Government Services Administration) Lists:

This government database holds information concerning parties who have been denied participation in FHA’s insurance programs OR other government contracts or programs because of wrongdoing.

Examine/search the list for all parties to the transaction and the loan application (borrower, co-borrowers, realtor, appraiser, seller, licensed professionals contracted to provide mechanical certifications, broker, originator, etc.).

If any party who has been “searched” appears on the LDP/GSA lists, the loan application is not eligible for FHA insurance and the loan must be denied.

A copy of the printouts for all the search information must be retained in the loan file.

Non-Purchasing Spouse (Borrower’s spouse is NOT on the loan application or the purchase contract) (Community Property States)

For purchases, if the subject property is located in a community property state OR for refinances, if the Borrower resides in a community property state, the following requirements apply:

  • A credit report for the non-purchasing spouse is required to determine any joint or individual debts that must be considered in the credit analysis. Any accounts that were opened by the spouse, but are joint accounts with the purchasing Borrower must be included in debt ratio to qualify for the loan.
  • Even if the non-purchasing spouse does not have a social security number, a credit report is still required.
  • All debt of the spouse must be included in the Borrower’s debt ratio (use 5% of the outstanding balance if not specified on the credit report), unless such inclusion of debt is specifically prohibited by state law.
  • If debts of the non-purchasing spouse are in dispute, they need not be counted provided the file contains satisfactory documentation to support the fact that the account is in a current dispute status.
  • A poor credit history of a non-purchasing spouse should not be the sole basis for declining the loan.

If it is required by a state law in order to perfect the valid and enforceable 1st mortgage lien, the non-purchasing spouse must sign the security instrument (mortgage) OR the spouse must provide satisfactory written documentation to verify he/she is relinquishing all present and future rights to ownership of the subject property.

The community property states are: AZ, CA, ID, LA, NV, NM, TX, WA and WI.

 

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