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CAIVRS waiting period after an FHA foreclosure

CAIVRS Waiting Period After FHA Foreclosure

The Question

The CAIVRS waiting period is important if you had a FHA mortgage on a home that was lost to foreclosure, deed in lieu of foreclosure or short sale.

That is the subject of a great question I received this week from Jennifer in Tennessee.

Could you please tell me when the 3-year CAIVRS countdown starts? 

Is it when the Sheriff’s Deed is recorded after the Sheriff’s sale, or is it when the bank re-sells the home.  I ask because our bankruptcy was in 2011, foreclosure ended and sheriff’s deed was recorded 4/16/14. 

However, the home wasn’t re-sold for another 2 years (August 2016).  We are in the middle of a contract and don’t want to lose this home.  I’m really hoping that the 3-year period starts after the Sheriff’s Deed is recorded.  Thank you!  Jennifer in Tennessee

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The Answer

CAIVRS is a Government database that tracks credit delinquencies and default on Government debt.  If you experienced a foreclosure, short sale or deed in lieu of foreclosure on a FHA mortgage, your waiting period before being eligible for another FHA mortgage is determined by CAIVRS, and not the foreclosure or resale date.

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FHA normally requires a 3 year waiting period from a foreclosure.

When the foreclosed mortgage was a Government insured FHA loan, the waiting period begins from the date that the mortgage insurance claim is paid to out to the lender who held the FHA loan that defaulted.

The mortgage insurance claim is paid out after the foreclosing lenders submits the claim to the Department of Housing and Urban Development (HUD).  This is where it can get tricky.

Since the waiting period begins from the date that the insurance claim is paid, the 3 year clock does not start until after the foreclosing lender submits the claim.  If the lender delays submitting a claim, this could delay your FHA waiting period

CAIVRS is not directly accessible to consumers so you may need the help of a FHA approved lender to determine when you will be eligible for a new FHA mortgage.

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Avoid the CAIVRS Waiting Period

You can avoid the CAIVRS waiting period by not using a FHA mortgage to buy a new home.

If using a Conventional mortgage, the waiting period begins from the date of the Sheriff’s sale or the date that your name is removed from title as the owner of the home.  You do not ever have to wait until the bank sells the home to a new owner.

In Jennifer’s scenario above, the mortgage was included in a bankruptcy and she could be eligible for Conventional financing after 4 years from the bankruptcy discharge date.  Here is the Fannie Mae underwriting guideline that would allow you to avoid CAIVRS completely after a bankruptcy.

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Foreclosure and Bankruptcy on the Same Mortgage

If a mortgage debt was discharged through a bankruptcy, the bankruptcy waiting periods may be applied if the lender obtains the appropriate documentation to verify that the mortgage obligation was discharged in the bankruptcy. Otherwise, the greater of the applicable bankruptcy or foreclosure waiting periods must be applied.

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About the Author

Scott Schang

A 20 year veteran of the Mortgage and Real Estate industry, I am passionate about educating and empowering consumers. I have been writing about consumer protection issues, and making sense of complicated real estate and mortgage topics on this website since 2007

Leave a Question or Comment About this Topic

  • Steph says:

    Hi, We filed for bankruptcy in 2019 after our home flooded and was a total loss. The mortgage on the home was a USDA rural development loan. This debt was discharged in the bankruptcy. We are hoping to apply for a FHA mortgage soon (the two year waiting period is up in April). Will FHA look at the two year waiting period for the bankruptcy or the 3 year waiting period for the foreclosure that was included in the bankruptcy.

    • Scott Schang says:

      Hi Steph, FHA actually looks at both, but they run concurrently so the only timeline that matters is 3 years from the date of the foreclosure. Now, that said, USDA will allow you to ignore the foreclosure date, but the BK waiting period is 3 years. So, USDA is probably going to be the “soonest” you could buy. FHA would be next.

      Hope this helps?

  • Karen says:

    Hi. I just learned after we signed a contract and paid for the inspection we are 50 days short of the 3 yr fha waiting period for foreclosure. I was told underwriting will give an exception as my husband had a cancer relapse prior to the foreclosure. I can’t get the explanation of benefits for another 10 to 14 business days due to the age. Is there anything else that would give underwriting proof of the treatment causing a financial hardship. We aren’t thrilled with sending medical records either. Any suggestions? Contract has a close date of the 23rd. We’ve held off ordering the appraisal to avoid spending money for a house we may not be able to buy. Thank you for your response

    • Scott Schang says:

      Hi Karen, FHA is actually quite strict when it comes to extenuating circumstances exceptions. Exceptions are typically limited to death or permanent disability of a primary wage earner. That said, what was the actual date of the foreclosure? The CAIVRS alert will stay in effect for 3 years from the date that the mortgage insurance claim from the foreclosing lender is paid, however, you can get the CAIVRS alert suppressed if 3 years have passed since the date your name was removed from the title to the property.

      It makes me a little nervous that your lender said you could get an exception and didn’t bring up the actual waiting period. I would like to suggest that you get a second opinion and consider working with a lender that has experience with these guidelines but at the very least. You should be able to get the foreclosure deed from public records and check the actual foreclosure date.

      If you would like an introduction to a loan officer that has experience with these guidelines, or if you have any other questions, feel free to email me directly at scott@findmywayhome.com

      Hope this helps?