Buying a home can be a grueling process, and having any sort of ding on your credit report can be detrimental when trying to get a loan. One of the pre-screening processes when trying to acquire a government backed loan is known as CAIVRS. Aside from a credit report, passing the CAIVRS screening is crucial if you want to qualify for a home loan. CAIVRS stands for Credit Alert Interactive Verification Reporting System. It is a government run database that shows any liens, outstanding federal debt, defaults, or delinquencies from your past. Unfortunately there is no way to know if you are on the CAIVRS until a professional runs the report. It is smart to have your mortgage broker run the report early in the loan approval process so that if you are on the list, you can figure out how to remove your name from CAIVRS.
What Agencies Report to CAIVRS
The CAIVRS report collects information from all of the following government agencies:
- The Department of Veterans Affairs
- The Small Business Administration
- The Federal Deposit Insurance Corporation
- The Department of Agriculture
- The Department of Education
- The Department of Justice
- The Department of Housing and Urban Development
Financial Stability is Crucial
If you find that your name did come up on CAIVRS, you know that your loan process will be put on hold until you take care of whatever delinquency is reported. It is impossible for the FHA to go in and edit the information on the report until it has been financially taken care of. This is why being financially stable is one way as to how to remove your name from CAIVRS. Whoever the creditor of the delinquency is, must verify that the debit is still active and has yet to be paid off. Some types of debt that can be paid of immediately are federal student loans, or a business loan through the SBA. Student loans allow a little more wiggle room than a business loan, often allowing you to set up a payment plan with the Department of Education or even a consolidation of your loans rather than paying them off in full right away. If you are able to pay the debt immediately, your name will be removed from the list and you can continue with the loan process once the report has been updated. The creditor must verify to your lender that the debt has been paid, and a new report can be ran.
The 3 Year Wait
If you have had a foreclosure on a home in the last 3 years, or if a claim has been paid on a FHA-insured mortgage within the last three years on your behalf, you will show up on the CAIVRS report. Unfortunately a three year waiting period once the claim has been paid is mandatory before you are eligible to apply for another FHA or government backed loan, such as a VA loan. In terms of how to remove your name from CAIVRS with a foreclosure or default on a home loan, the most you can do is just wait for the 3 years to pass.
Exceptions to the Rule
There are a few ways as to how to remove your name from CAIVRS aside from paying off your debt in full or waiting the 3 year eligibility period. Sometimes people will show up on the list for circumstances out of their control. There are 3 circumstances that are considered exceptions: divorce, assumptions, and bankruptcy. If you have recently been divorced and your significant other was given the home in which the loan was secured and proceeded to default on the mortgage following the divorce finalization, you may still be eligible for a government back home loan, even if your name appears on CAIVRS. You may be wondering what an assumption is. An assumption is when a home is sold and the loan is assumed by the buyer, rather than getting an entirely new loan. If the buyer defaults on the loan, the original seller will still be able to receive financing on future properties without the hindrance of the defaulted loan. The last exception to the CAIVRS report may be bankruptcy. If you claimed the mortgage on your bankruptcy and you had to file for reasons out of your control, such as the death of the main provider, or an illness in the family that caused great financial struggle, you may still qualify for a government backed loan. These are the few exceptions and how to remove your name from CAIVRS.
How to Remove your Name from CAIVRS
Although it is a tedious task, there are a few ways as to how to remove your name from CAIVRS. It is important to first acknowledge why your name is on the report in the first place so you can further investigate the report and the legitimacy of the claim. Mistakes to occur, so it is important to know your credit history. The most important aspect to acquiring a home loan is being financially stable and proving that you will be for the greater part of the future. Buying a home is everyone’s dreams, make sure you are prepared to handle any delinquencies of your past before you begin the mortgage loan process.