FHA: CAIVRS, LDP, and GSA
CAIVRS (Credit Alert Interactive Voice Response System): The
Social Security number 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.
- A Clear CAIVRS on the spouse is required.
- 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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