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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. 

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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.

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.

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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.

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.

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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.


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 Your Expert

Scott Schang

As a 19 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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  • Shawna Armstrong says:

    Hi Scott! Need desperate help. We had a foreclosure on a Conventional loan. The deed officially was reassigned to the mortgage company in July of 2015. So I thought that we were good to get a FHA loan since 7/18. But it is reporting on our credit report as the foreclosure closed date being 4/16. When is the 3 yrs from? How do we go about getting around the fact the credit reporting is flagging us with lenders as not being 3 yrs out?

    • Scott Schang says:

      Hi Shawna, this isn’t difficult for an experienced loan officer to figure out. The waiting period will officially begin on the day that your name is removed from title. This “chain of title” is public record, so it can be discovered pretty easily.

      If the deed was reassigned to the mortgage company in July 2015, then you should be fine. Shoot me an email to scott@findmywayhome.com and let me know what State you’re in? I’ll introduce you to a lender friend of mine that has experience with these guidelines and knows what to look for.

      Was there a bankruptcy filed prior to the foreclosure by any chance?

      Hope this helps!

      • Shawna Armstrong says:

        I am in Las Vegas, NV.
        The foreclosure was in Mesa County, CO.
        I looked up the deed on the county website to find the date.
        When I have applied, the loan officers have said that my loan request is coming up flagged as “referred” through 2 different credit unions. So I tried with an online loan deal and the guy said that it is coming back flagged because my foreclosure is reporting as Feb 2016. I hadn’t really paid much mind to the dates of reporting on my credit report because I thought that it was the deed that mattered. When I went to check – it is different (with Ditech’s credit report update ranging from foreclosure close date of 2/16 to 4/16 across the 3 different credit agencies and my husbands and my reports).

        • Scott Schang says:

          Credit reports can be updated to reflect the accurate date. I’m surprised that they tried to get an approval if it was reported in 2016. You would not have ever received an approval if the credit report is reporting wrong. Would you like to talk to my friend that is licensed in NV? I have your email, I can introduce you to Mia by email.

  • Nicole says:

    Hi Scott,
    If a home is put into foreclosure and the owners of the home pay off the late payments and retain the home and the home is then removed from the foreclosure process, when does the three-year foreclosure wait period officially end for those homeowners? Does it end three years from the day all of the late payments were received by the bank? I have been told that even though the home was never sold in foreclosure since the foreclosure process was initiated by the bank, it still counts as a foreclosure on our credit. Is this true? Also, after the three-year waiting period passes, will FHA still require documentation of the circumstances that led to foreclosure before they will approve a new home loan?

    • Scott Schang says:

      Hi Nicole, if you live in a State with a redemption period, I do not believe that expunges public records of your foreclosure event. I would definitely make some phone calls before saying that you have to wait, but I’m 99% sure you’re waiting.

      FHA is a 3 year wait. I would definitely talk to your lender, or I can introduce you to someone, and talk to them about manual underwriting options. The DTI is a little more strict, but it will allow an underwriter to take a closer look at the overall file, instead of just what the guidelines imply.

      Under no circumstances should a lender ask you to document the circumstances that led up to the BK, but you will be asked for the petition, the discharge, and the notice to creditors.

      If you’ve met the waiting period, you’re good to go. Nothing else to worry about.

      Hope this helps?

      • Nicole says:

        Hi Scott,

        Thank you so much for your prompt response. Yes, we have waited over three years. We are planning to sell our house now and we were just trying to figure out if will be able to qualify for an FHA loan on our next home, or if FHA will require documented information explaining the circumstances that pertained to the previous foreclosure. We live in Southern California. We didn’t have a bankruptcy so there was no discharge or notice to creditors. However, foreclosure was initiated and it ceased when we paid off the late payments to the mortgage company. It has been approximately 3 1/2 years since we paid off the delinquent payments. Thank you again for taking the time to respond to me. I’m truly grateful.

        Best regards,
        Nicole

        • Scott Schang says:

          Hi Nicole, well, you’re in luck! My company, BuyWise Mortgage is in Southern California – that means I can go to my underwriters and get this figured out for you. I think you should be fine, and would feel a million times better if you are ok with my team looking into this for you. I’ll shoot you an email so you have my direct contact information. Let’s chat more about this. First and foremost, let’s make sure you qualify for the new loan before thinking about selling the old one 🙂

  • Eva Irons says:

    Hi Scott! I too have sent you an email, I hope you will be able to give us some advice. Thank you in advance!

    • Scott Schang says:

      Hi Eva, I answered your email! I normally post the question and answer here so that others can benefit too, but your situation is very unique and quite personal, so please refer to the email 🙂

      Hope this helps?

  • Cathy Hamiy says:

    Do you finance in Alabama. I am going through trying to get a CAVIRS removed. I am at the 3 years and 1 month from the time of seed transfer It has been a nightmare trying to get an answer or even communication from them. What are my options

  • Joan Marie says:

    Hi Scott, sent you an email in your box Hope you will respond

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