What is a CAIVRS Report Used For?
What is a CAIVRS Report? Quite simply put it is a way that the US Government tells on those that have delinquent Federal Debt. CAIVRS stands for “Credit Alert Verification Reporting System.” Various lenders that are participating in or offering Federal Loan programs use CAIVRS to make sure that the loan applicant applying for a new Arizona home loan is not currently behind or default on any other Federal related Debt. In fact CAIVRS will tell a lender if an applicant has “a Federal lien, judgment or a Federal loan that is currently in default or foreclosure, or has had a claim paid by a reporting agency” (www.hud.gov).
Each borrower that is applying for a government insured home loan is pre-screened using CAIVRS. If their CAIVRS report comes back negatively they cannot obtain a new home loan even if they meet the specific mortgage guidelines for the loan they are qualifying for. If a borrower does not have any outstanding Federal Debt/Federal Liens their CAIVRS will come back blank. In other words a blank report is good in the CAIVRS world!
What is a CAIVRS Report Using as a Data Source
The government’s CAIVRS system pulls data for borrowers from several different government databases. The databases that CAIVRS utilizes are:
What is a CAIVRS Report’s Role in Mortgage Lending
Borrower’s applying for an FHA, VA or USDA loan will have a CAIVRS report generated prior to full loan approval. If they do not pass the CAIVRS screening they are not eligible for an FHA, VA or USDA mortgage. The government uses CAIVRS to both make sure they do not continue lending Federally insured loans to those that have defaulted on previous Federal Debt. They also use it to track down those that owe money on defaulted Federal Loans.
If a borrower has debt show up on their CAIVRS they can often “clean it up” by paying off the Federal Debt that is currently in default. A mortgage lender can regenerate a CAIVRS once a borrower has notified them that the debt has been paid. Also, foreclosures on federally insured mortgages will show up on CAIVRS however if the borrower is past the minimum waiting timeframe than they will be eligible for a new government insured loan relative to CAIVRS (they would still need to meet all other relative mortgage guidelines).
HINT: When your lender asks you “are you default on any federal debt?” do NOT try to hide anything. It will pop up on your CAIVRS and could cost you time and money once you get into final loan processing and underwriting.
Please contact us if you have were wondering what a CAIVRS report is and how it impacts you. Team Phone: 602.435.2149 Team Email: Team@JeremyHouse.com