What is CAIVRS Check? How Do I Pass It?

By Gina Pogol
Mortgage Credit Problems Columnist

Angela Asks: Dear Gina, I was refinancing out of my bad credit mortgage and into an FHA home loan but I was told that I couldn't because I came up on something called "cavers." What is that and what can I do?

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Gina Says:

Dear Angela,

CAIVRS (pronounced "cavers") stands for Credit Alert Interactive Voice Response System. CAIVRS was created by HUD. It's a federal government database that lists people who owe the federal government money, have had claims paid on direct or guaranteed federal loans, or there is a federal lien, judgment, or a federal loan that is currently in default or foreclosure, or they have had a claim paid by a reporting agency. Your lender should be able to tell you why you're listed on CAIVRS.

While bad credit mortgage lenders don't check CAIVRS, you can't get a government loan as long as you are on that list. You need to take steps to get off of it by paying the debt or at least bringing it current under a repayment plan. Then, you have to get a written copy of the plan from the creditor. (Federal IRS tax liens may remain unpaid as long as the IRS subordinates the tax lien to the government mortgage.)

If you think that you have been listed on CAIVRS by mistake (this is not uncommon), have the lender get the information for you--what creditor or agency reported you and the circumstances surrounding the bad credit reported--and straighten it out. There are also exceptions--for example, if you sold a home with a government loan on it that your buyer assumed and then defaulted on, you are not held responsible and should be taken off CAIVRS. Other exceptions are divorce (if your ex-spouse was awarded the property and subsequently defaulted on the mortgage) and bankruptcy; if the property was included in a bankruptcy that was due to circumstances beyond your control (like a serious illness), you may be eligible to be removed from CAIVRS and get your FHA mortgage.

The federal government is one of the toughest creditors out there. While it may make or guarantee a loan that no one else will, it also takes great pains to recover what it's owed. And it has the resources to make you pay up, sooner or later.

Good luck and thanks for writing.

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