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CAIVRS measures waiting period from foreclosure, short sale, deed in lieu

FHA Waives CAIVRS Waiting Period After Foreclosure, Short Sale or Deed in Lieu?

CAIVRS is an automated monitoring system that tracks defaults on Government debt.

If you have  been a victim of foreclosure, short sale, or deed in lieu of foreclosure on a FHA or USDA mortgage, you will have a CAIVRS alert associated with your social security number.

Default on student loan debt will also trigger a CAIVRS alert, and can prevent you from using a FHA or USD Government insured mortgage.

  • Waiting Periods after Losing Your Home
  • How CAIVRS Can Stop You From Buying a Home
  • Did HUD waive the CAIVRS Waiting Period?
  • Working with a Mortgage Expert
  • Setting Yourself up for Success

Waiting Periods After Losing Your Home

Since 2008, there have ben many families across the Country that fell victim to bankruptcy, foreclosure, short sale or a deed in lieu of foreclosure as a result of the real estate collapse.

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The path forward, if you experienced one of these financial set backs, is typically just a waiting period.  The waiting period to be eligible to buy again will depend on the type of financing you are using.

Conventional Waiting Period

You can buy using conventional financing in:

  • 4 Years after the discharge of a Chapter 7 Bankruptcy
  • 2 Years after the discharge of a Chapter 13 Bankruptcy
  • 4 Years after a Short Sale or Deed in Lieu of Foreclosure*
  • 7 Years after a Foreclosure*

* If your mortgage was included in bankruptcy, and a foreclosure, short sale, or deed in lieu occurs after the discharge, an underwriter may use the bankruptcy waiting period and ignore the subsequent default of the mortgage.

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VA Waiting Period

You can buy using VA financing in:

  • 2 Years after the discharge of a Chapter 7 Bankruptcy.
  • 1 Year after Filing a Chapter 13 Bankruptcy if you have satisfactorily made at least 12 months worth of the payments and the Trustee or the Bankruptcy Judge approves of the new credit.
  • 2 Years after a foreclosure or deed in lieu of foreclosure.
  • Short Sale – VA does not recognize a short sale as a derogatory event.  If you are able to credit qualify for a VA loan, a short sale would not prevent you from being eligible for VA financing. Updated 4/2016

USDA Waiting Period

You can buy using USDA financing in:

  • 3 Years after the discharge of Chapter 7  or 13 Bankruptcy
  • 3 Years after a Short Sale or Deed in Lieu of Foreclosure*

* If your mortgage was included in a bankruptcy, and a foreclosure, short sale, or deed in lieu occurs after the discharge, an underwriter may use the bankruptcy waiting period and ignore the subsequent default of the mortgage.

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FHA Waiting Period

You can buy using FHA financing in:

  • 2 Years after the discharge of Chapter 7 or 13 Bankruptcy.
  • 1 Year after the discharge of a Chapter 13 Bankruptcy (manual underwriting only).
  • 3 Years after a foreclosure, short sale or deed in lieu of foreclosure.

How CAIVRS Can Stop You From Buying a Home

If your foreclosure, short sale, or deed in lieu happened with a FHA or USDA mortgage, a CAIVRS alert is in effect for 3 years from the date that the mortgage insurance claim is paid to the original lender.

While all other waiting periods are measured from the date that the deed of trust is transferred out of your name, the waiting period for a new Government mortgage begins from the date the mortgage insurance claim is paid.

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CAIVRS claims are causing considerable challenges for home buyers that were shocked to find out that the mortgage insurance claim was not issued until months, or even years after the home was transferred out of your name.

This biggest challenge with having a CAIVRS land mine explode under your feet is that inexperienced loan officers do not even know to look for this surprise, until it’s often too late.

If not caught early, the CAIVRS alert will not be caught until you are well into the process to buy your new home.  More often than not, this challenge rears it’s ugly head weeks before the closing date.

Did HUD waive the CAIVRS Waiting Period?

I am now seeing a pattern of HUD volunteering to suppress the CAIVRS alert if you provide them with a scanned copy of the transfer deed removing your name from title.

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I have seen this done several times in the past 30 days, and it was undeniably confirmed when I got this email from a client:

Please email a copy of the Trustee’s Deed Upon Sale to answers@hud.gov. If the sale occurred over 3 years ago we can process an early CAIVRS suppression.

You may also speak directly to a customer service representative by calling 1-800-CALL-FHA (1-800-225-5342) from 8am to 8pm EST or visit our online knowledge base at www.hud.gov/answers, 24 hours/7 days a week.

This is not an isolated incident.  Because we specialize in qualifying for a mortgage after a financial hardship, I see patterns and emerging trends.

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I’ve taken at least four phone calls and emails in the last few weeks about CAIVRS suppressing the alert so that you can go by the foreclosure, short sale, or deed in lieu date, and not when the mortgage insurance claim was paid.

I have also confirmed that mortgage experts from our Expert Network have confirmed that they are seeing these same results.

Working with a Mortgage Expert

Choosing the best mortgage based on your qualifications requires that you work with a professional loan officer that has experience with all of the options that are available to you.

All mortgage companies are NOT created equal.  Big box lenders that advertise on TV, radio and the internet, often only target a very narrow qualifying criteria.

These popular lenders spend millions of dollars on marketing and advertising, only to dump you into a call center and put you in the hands of an inexperienced customer service telemarketer.

Big box lenders try to convince unsuspecting consumers that it’s the lender that matters, and never mention the fact that your loan officer is the gateway to you getting the best mortgage.

You should avoid these types of lenders at all costs if possible.  They do not offer lower rates or better service, but they do have more money to convince you that they do.

Set Yourself Up for Success

The absolute first step to buying a home is to get your financing ducks in a row before you start looking for home.  This means working with a mortgage professional.

Once you find an expert loan officer that you trust, ask them for an introduction to a local real estate agent that they trust.  Even if the loan officer is not from the community that you’re buying in, they will still be able find an agent that rises to the level of professionalism you deserve.

Not sure where to find a professional loan officer that you can trust?  You’re in the right place!

If you have any questions or comments about this topic, feel free to leave a comment below, or you can shoot me an email at questions@findmywayhome.com.

Now sure how to identify a professional loan officer?  Watch these expert interviews I’ve done with professional loan officer friends of mine.

I firmly believe that once you hear how a professional loan officer communicates, it will help you to avoid silly mistakes and errors that are common with inexperienced or uneducated loan officers.

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

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  • Melanie says:

    I am a single mother of twin disabled girls and I am a couple weeks from my FHA loan closing on my dream home which will be where my girls will receive supported living when my name came up in this CAIVRS database in what I believe to be error.
    After contacting the Dept. of Ed. my hope is lost. I am requesting a very quick removal of my name or at least a move of the suppression date after Oct. 15 but I don’t know if I can get this.

    Here is my situation. As the result of a house fire from a gas explosion, a long unemployment of my ex. and the birth of twins with special needs, my family experienced severe financial difficulties. During this period of time my student loans went into default. Later down the road, we separated, I got a graduate degree and then a divorce. During the divorce, my ex decided to file bankruptcy. My lawyer advised me to do the same since my name was on several of his accounts, so we jointly filed for bankruptcy which discharged in August of 2017.

    In the bankruptcy, I listed my student loans. A credit report shows these accounts as closed. When I attempted to make a payment, I was told that those accounts were no longer serviced by the Dept. of Ed. Fast forward about 2 years.

    I got a fantastic job as a school district administrator, got my credit in good shape and saved for a downpayment. I was prequalified and everything was going great with the loan until we got to underwriting and my name came up in the CAIVRS database.

    I contacted the Denver Homeownership Center (my region for MO) and was told I needed to contact the Dept. of Ed. I went up as far up the chain as I could go and was told the only thing I could do was consolidate or rehabilitate my loans. I am more than willing to do that, though I am still confused as to how I could be paying on accounts that are closed. However, I was told that my name could not come out of default status for 10 months when I have made 9 regular payments.

    I don’t have this kind of time. If I don’t get loan confirmation by having my name out of CAIVRS by the 25th of September, I will not be able to buy my home with FHA. I have one more year before I can go conventional due to the bankruptcy.

    I am absolutely distraught and don’t know what to do. The place I am living in does not have good living conditions for my family and it quite possibly is already rented out. The best case scenario for me would be to at leas temporarily get my name removed from CAIVRS so that I can close while this matter is being investigated. If that is in fact an error, I am more than happy to make payments and make things right with the Department of Education. What I don’t have is the gift of time.

    Do you have any suggestions?

    • Scott Schang says:

      Hi Melanie, I’m so sorry to hear about this, it’s absolutely heart-breaking. I will spare you the part where I rip into the loan officer for ever allowing you to get this far into the process when this land mine was sitting out there waiting to stop you in your tracks. This could have been prevented.

      Ok, got that out of my system – let’s talk about solutions. Unfortunately, your options are extremely limited. You cannot discharge federal student loans through bankruptcy, but you can prevent them from trying to collect.

      The only way around this that I can see is to figure out a way to pay the delinquent loans in full. Do you have a relative that can help you pay this? If you pay it in full, you can get the CAIVRS alert removed. If it’s possible to find someone to help, you will need to run this scenario by your loan officer to make sure it doesn’t violate any other underwriting guidelines.

      The money may need to be received by you in the form of a “gift”

      This certainly isn’t your fault. If your loan officer would have caught this, your path would have been different and you wouldn’t have found yourself in this urgent, time sensitive situation. If you cannot pay the student loans in full, you may have to make the payments until you’re eligible for financing.

      I hope this helps?

  • Carly says:

    I am wondering if you can help
    My house is going to short sale the mortgage and deed were in my ex husbands name. He was told to do a quick claim deed to get the modification. It was denied. He is selling the house in a short sale. I was told I would have no problem getting a house bc I was not on the mortgage. I found a home and was told I won’t be able to get a mortgage bc the deed is in my name. I’m confused. He did a quick claim deed when the foreclosure process started to get a modification which was denied.

    • Scott Schang says:

      Hi Carly, this is a tough situation. If you were on the deed at the time of the foreclosure, it’s going to get difficult to not have that tied to you.

      There are a couple of potential options for you. Was there a bankruptcy by any chance? One other possible solution is if you clearly stated in the divorce decree that your ex-husband is responsible for the home, and you are not?

      There are a few moving parts here, and I can help you narrow down your options. If you would like, shoot me an email to scott@findmywayhome.com and let me know what Sate you’re trying to buy in.

      Hope this helps?

  • Daniel says:

    Hello Scott,

    We are currently in a mortgage process for an FHA loan however, we were listed on CAIVRS for delinquent school loans. At one point the school loans were private but they were acquired by the government later. Our lender stated it is possible to have the status “suppressed” or waived if we can show continuous payment on the loans. Since finding out we placed both loans in a rehabilitation program and have made on time payments for the last 4 months. As of right now we still haven’t heard anything. Is there anything else that can be done in this situation? Should I call CAIVRS myself? My lender is currently doing this so I don’t want to muddle up the process but time is of the essence.

    Thank you.

    • Scott Schang says:

      Hi Daniel, I do not have personal experience with defaulted student loans being in a rehabilitation program, and it certainly will not screw anything up if you call CAIVRS. Actually, I suggest you do call them yourself.

      I can confirm that a payment plan can allow you to qualify if you have tax liens or judgments, but student loans follow additional guidelines that can add to the complexity of this situation.

      Hopefully, your loan officer also used 1% of your student loan balance when calculating your debt to income ratio? If using FHA financing, the payments on your loans must be fully amortized to pay the loans off in full at the end of the loan term, or the underwriter will use 1% of the outstanding balance as a “payment”.

      Also keep in mind that if CAIVRS stops you in your tracks, you have Conventional financing using Fannie Mae or Freddie Mac underwriting guidelines available as an option. No CAIVRS with Conventional.

      I hope this helps?

  • Jeff says:

    I have my home I’m in currently in under contract with a buyer and have been excepted by a seller on my offer on a new house credit score showed good for a fha loan and got all the paperwork done during the covid 19 pandemic I have to do a forbearance plan and went to deferred payments. Little did I know that there was something called caivrs and I have a poor rating with them do to the deferred payments. This is me and my fiancé’s dream home and we are supposed to close on July 20th how can I get my name off caivrs to close on this house in time? In search of advise…

    • Scott Schang says:

      Hi Jeff, there may be other issues here that need to be addressed. When you say you have a forbearance, do you mean that the current home is in forbearance? Did you experience a financial hardship due to COVID-19 that required you to stop making payments?

      I have a feeling that there’s more to this story. Can you shoot me an email to scott@findmywayhome.com and let’s try to figure this out.

      I have a couple of guesses, but it will require more answers before I can understand what options are available.

      If your current home is in forbearance, and you’ve skipped payments, that could be a challenge. If you have student loans in administrative forbearance, that could be another reason for the CAIVRS alert.

      If you can give me a little more details in the email, we can figure out the best path forward.

      Hope this helps?

  • Doug Mayland says:

    We closed on our home loan a month ago. Now FHA says the cant insure it because I’m on the caviers list. WHAT WILL HAPPEN NOW?

    • Scott Schang says:

      Hi Doug, we’ve actually encountered this before. This is in NO WAY your problem. The lender made a mistake and now they have to fix it. Basically, they are going to have to convert your loan into a Conventional loan, which under normal circumstances might cost more and have a higher rate. That’s not your problem. Their other option is to hold the loan and you make payments to them. Either way, this is in no way your responsibility.

      I hope this helps?

  • Ricky says:

    Hello!

    Please HELP, I got pre approved for an FHA loan , I am already under contract with my dream home everything was going great until my lender told me I have a defaulted student loan? This was not on my credit report nor affected my credit score. This student loan was from 2010. What are my chances for approval have you had a scenario like this ? I need all available options to help me get this approval for me and my family. Thank you!

    • Scott Schang says:

      Hi Ricky, you have a couple of options. One would be to switch your loan to Conventional financing that follows Fannie Mae or Freddie Mac underwriting guidelines. The student loan will not be an issue.

      The other solution might be to pay back the defaulted student loan and clear CAIVRS. If you absolutely cannot qualify for a Conventional loan, call CAIVRS yourself and explain your situation. Ask them what your options are for suppressing the alert. You can speak directly to a customer service representative by calling 1-800-CALL-FHA (1-800-225-5342) from 8am to 8pm EST or visit our online knowledge base at http://www.hud.gov/answers, 24 hours/7 days a week.

      I hope this helps?

  • Sandra says:

    First of all, thanks for all you do to help others such as myself. My plan is to construct or build my own home one day. I need to know where to begin to have my path to a second chance.
    I bought a house through USDA RD in 2010. Didn’t live in it for 2 years before I filed Ch 7 BK in 2019. I’m discharged as of January 2020. I called USDA RD and they said that the property was in their REO portfolio and they would have the department call me. Never happened. I called the local courthouse and they said that the foreclosure deed was done in October 2018 and a tax sale (Alabama) was completed to another individual in May 2019. She also said that USDA would have to redeem it if they wanted to. I’m not savvy to the terminology of real estate. How long would I need to wait to apply for a FHA mortgage with said guidelines? Am I in the clear with the deed?

    • Scott Schang says:

      Hi Sandra, thank you for the kind words 🙂

      To qualify for an FHA loan, you simply have to meet the waiting period guidelines following your hardships. FHA considers the Bankruptcy and the Foreclosure as two separate hardships with two separate waiting periods.

      There is a 2 year waiting period from the discharge of the bankruptcy, and there is a separate 3 year waiting period after a foreclosure. These timelines run concurrently, so you only have to wait for the longest waiting period, and the other will be passed by then.

      Based on what you’ve told me, it sounds like the foreclosure took place upon execution of the tax sale in May 2019. That would make you eligible for FHA financing in May of 2022. The BK waiting period will be up in January 2022, so no need to worry about that.

      Hope this helps?

  • Jaynie DeCicco says:

    My ex was awarded the house in our decree. He refused to pay the mortgage for years. The bank did nothing for over 3 years. Every time the house goes into foreclosure status he files for bankruptcy again! He was supposed to get my name off within 60 days of decree signing. It’s been 11 years. My husband and I bought a home a year and a half ago and we are trying to re-finance but they won’t approve because I am showing on the CAIVRS. I filed CH. 7 in 2016. It’s been 4 years. I have no idea how to get off that report or away from that loan. I don’t even know what kind of attorney I could ask…

    • Scott Schang says:

      Hi Jaynie, I’m sorry to hear about this sneaking up on you, I feel like we can get around this.

      It sounds to me like the home foreclosed between the time you purchased your home a year and a half ago and now.

      Your loan officer should be able to take care of this for you. You’re going to need to look up public records to see when the foreclosure took place. Then, you’re going to have to document that you are not responsible for this mortgage per the divorce decree.

      When your ex was “awarded the house” in the divorce, did you do a Quit Claim deed to remove your name from title to the property?

      If your loan officer is not helping you with this, it might be time to get a second opinion.

      If you can answer these questions, shoot me an email to scott@findmywayhome.com and let me know what State you’re in. Again, it seems like we can figure this out. The documentation is going to be key.

      Hope this helps?