FHA finally does it!!! New program waiving waiting period for extenuating!!!!

[pinkpeanut01]

Thanks for the update, Sue! I will be following the saga closely.

[copernicus]

I guess my wife and I are just evil. Bad BK folk, bad!

We're currently waiting for a "willing" lender to power up with the August 19, 2013 FHA rule change.

Here's our experience . . .

First our status, BK discharged over 3½ years ago, included foreclosure. Now employed over three years, same employer (not same as prior), good salary, near what I had prior to being laid off. No debt, none. Middle credit score (significant for our lender): 678. Credit history sparse, one credit card 2½ years, always paid off. Second credit card seven months always paid off, third credit card two months same as first two, this card doesn't show up on credit reports. Retired military so I have a guaranteed income on top of employment. Some money in 401K, not big, but not tiny.

We decided to dream and contacted a realtor about a piece of property we saw online, visited it and decided to try and see what we could do. First hiccup was discovering it was a manufactured home, formerly (before 1976) known as a mobile home (not the same as modular). This place makes most stick built homes look sick. But, "manufactured" makes VA and most conventional lenders shut their door. That was our first shocking disappointment. But, our realtor has us contact a broker who says they can work with us. Laid it all out and got a pre-qual from a lender. Wrangled a nice deal and paid earnest money. Took the FHA housing counseling session and assembled the loan application and submitted for underwriter review. Now they discover our former mortgage company never bothered to take our name off the title until fifteen months ago when the sheriff auctioned the property for taxes. Shockingly disappointed on August 16th. Then the broker calls us on the 20th and tells us the lender said they were going to work with the new FHA rules but won't be powered up to consider applications until September 15th. Now we have all the qualifications other than showing the "hardship" requirement. No guidance on that yet but I put together a packet with W2's, 1099's, termination letter, and a sheet outlining we had a loss of well over the 20% (closer to 50%) for eleven months. Our broker has reviewed this and they think the documentation I assembled should exceed the requirements when they come out.

We got an extension on the contract to the end of September and I am pretty sure they'll extend another couple of weeks if we can show an underwriter pre-qual for us but we're just waiting on the FHA property assessments and inspections.

We're looking at a PITI that comes to just about 10% of our gross monthly income. Seller is paying all closing costs. Currently they only want 3.5% down and we have that no sweat. We can double that without doing without.

Here's what I don't understand. When we hit the three year rule for the foreclosure I told the broker I was willing to cash in one of my 401K's and put essentially 38% down he said that four years ago he could find an angel lender no sweat. Maybe as much as a half point higher but they would come crawling out of the woodwork. But, he says that's all gone. So I am amazed that there's no one willing to make a little money on someone who has more than enough guaranteed income (military retirement) to pay the note and probably 40% to 45% equity right off the bat? Things must be bad, much worse than I have noticed.

Now we're waiting to see what happens at the middle of the month. By all that I can see we should glide through on these new requirements but I just have a feeling these folks are looking to disqualify rather than help.

This wait is excruciating!

[eener]

What ended up happening with your loan? Were you approved?

[copernicus]

What ended up happening with your loan? Were you approved?

Our lender dragged their feet on this but announced they would accept applications under these rules starting September25. With that our agent negotiated an extention with the sellers out to 25 October. We recompiled all of our latest financial documentation and re-signed the thirty or so forms and our broker resubmitted last Tuesday, 1 October. We should be hearing something from the underwriter any day now.

I'm thinking the broker is optomstic as they have asked if we wanted to submit our down payment to lock in the interest rate at 4.75%. I think they are looking for easy cash to pay for the appraisal and inspections FHA requires. We declined as this money would be difficult to retrieve if the property doesn't meet FHA standards and the seller refuses to pay for required improvements/repairs. As it goes, the broker will have to pay for these inspections then retrieve the funds from the seller on closing.

So, in a nutshell, still waiting . . .

[tobee43]

i can tell you what we just hit with FHA. doesn't matter about any rules regs, nothing if you are still listed on their CAIVRS list you are out. doesn't matter when or even if you had a foreclosure with FHA (we didn't) FHA told us a couple weeks about we are still going to be on their for another 2.5 years. now, the lender we were working with said simply if you are on that list whether it was 2 years 4 years 3 years from this date or that date the answer is NO.

i said to the lender i don't get it we have a HUGE down payment, actually one that actually pays for the house in full, we would just a bit more for some 'extra's" on the house i.e. energy saving items for heat and cooling systems, electrical "upgrades) i can't believe a 220 volt receptacle is considered an upgrade in today's world. however didn't matter for the loan. i said what about conventional? i have 99.99% down ( not really but just about) no said the lender no more conventional lending here, i was floored. also i was floored to find ourselves on the CAIVERS list as we had checked it years back and it never showed up


Tuesday, October 08, 2013

http://portal.hud.gov/hudportal/HUD?...s/cavirs_legal


Under what legal authority is CAIVRS implemented?

Title 31, United States Code, Section 3720B bars "delinquent Federal debtors from obtaining Federal loans or loan insurance guarantees."

The Office of Management and Budget (OMB) has mandated that all Federal Credit agencies prescreen all applicants for non-delinquency in Federal debt, and, if practical, do the prescreening through a system of shared data. CAIVRS provides a single repository of delinquent Federal debtor records with easy access through a variety of media and over 61 thousand authorized user IDs from HUD, USDA, VA, SBA, FDIC, and the Departments of Education and Justice.

Most credit bureau reports do not identify insured debts as being delinquent Federal debts. CAIVRS is the only system of shared delinquent Federal debtor records currently available to support the OMB mandate.

CAIVRS authority derives from Public Law 100-503, "The Computer Matching and Privacy Protection Act of 1988," as amended; Office of Management and Budget (OMB) Circulars A-129 (Managing Federal Credit Programs) and A-70 (Policies and Guidelines for Federal Credit Programs); the Budget and Accounting Acts of 1921 and 1950, as amended; the Debt Collection Act of 1982, as amended; the Deficit Reduction Act of 1984, as amended, and the Debt Collection Improvement Act of 1996, as amended.

CAIVRS supports the HUD Home Ownership Centers and HUD 2020 Reform Initiatives.

so none of it means much of anything if you name is on the list

[eener]

i can tell you what we just hit with FHA. doesn't matter about any rules regs, nothing if you are still listed on their CAIVRS list you are out. doesn't matter when or even if you had a foreclosure with FHA (we didn't) FHA told us a couple weeks about we are still going to be on their for another 2.5 years. now, the lender we were working with said simply if you are on that list whether it was 2 years 4 years 3 years from this date or that date the answer is NO.

i said to the lender i don't get it we have a HUGE down payment, actually one that actually pays for the house in full, we would just a bit more for some 'extra's" on the house i.e. energy saving items for heat and cooling systems, electrical "upgrades) i can't believe a 220 volt receptacle is considered an upgrade in today's world. however didn't matter for the loan. i said what about conventional? i have 99.99% down ( not really but just about) no said the lender no more conventional lending here, i was floored. also i was floored to find ourselves on the CAIVERS list as we had checked it years back and it never showed up

How do you find out if you are on the list?

We are still in our house (27 months without a payment) and we have about $900 a month in extra expenses because of our location. The problem with moving is rent is around $1500 a month. We can probably work out a loan mod (if we sign a new note) for around $950 a month - but with the extra $900 in expenses that's $1850 and $350 more a month than if we moved. If we moved quality of life would be much better! I am just so frightened of the uncertain. I have had medical issues since a month after we bought this house and was just diagnosed with MS. I'm not sure if we would qualify for this new FHA program because we borrowed money from CCs for years to live on before we realized we were bankrupt...then we waited and were in denial and just changed our cell numbers before we actually filed. So our 20% or more reduction in income actually happened about 5 years before we filed and 3 years before our last mortgage payment.

Such a mess. Our mortgage was conventional, so maybe we aren't on the list.

[eener]

Our lender dragged their feet on this but announced they would accept applications under these rules starting September25. With that our agent negotiated an extention with the sellers out to 25 October. We recompiled all of our latest financial documentation and re-signed the thirty or so forms and our broker resubmitted last Tuesday, 1 October. We should be hearing something from the underwriter any day now.

I'm thinking the broker is optomstic as they have asked if we wanted to submit our down payment to lock in the interest rate at 4.75%. I think they are looking for easy cash to pay for the appraisal and inspections FHA requires. We declined as this money would be difficult to retrieve if the property doesn't meet FHA standards and the seller refuses to pay for required improvements/repairs. As it goes, the broker will have to pay for these inspections then retrieve the funds from the seller on closing.

So, in a nutshell, still waiting . . .

I hope everything works out!!!

[tobee43]

How do you find out if you are on the list?

We are still in our house (27 months without a payment) and we have about $900 a month in extra expenses because of our location. The problem with moving is rent is around $1500 a month. We can probably work out a loan mod (if we sign a new note) for around $950 a month - but with the extra $900 in expenses that's $1850 and $350 more a month than if we moved. If we moved quality of life would be much better! I am just so frightened of the uncertain. I have had medical issues since a month after we bought this house and was just diagnosed with MS. I'm not sure if we would qualify for this new FHA program because we borrowed money from CCs for years to live on before we realized we were bankrupt...then we waited and were in denial and just changed our cell numbers before we actually filed. So our 20% or more reduction in income actually happened about 5 years before we filed and 3 years before our last mortgage payment.

Such a mess. Our mortgage was conventional, so maybe we aren't on the list.

shoot!!! i can't find it!mm ( pretty much dumped everything in the pile that didn't help), although this was good information as we knew nothing about it. i think it's CALL: (800) CALL-FHA or (800) 225-5342 . i know i got a person immediately gave them my information and within seconds they found we were on the list.

i hope you aren't on the list. again we worked around it, but it wasn't cheap

[copernicus]

I hope everything works out!!!

Thanks, this wait is tough. About this CAIVRS issue; this is the first time I've heard of this but I appreciate the education. I have to imagine that this would be the first or one of the first checks a lender would perform for an FHA loan application. The only thing that I think that could have put us on the list would have been the foreclosure on our previous FHA mortgage. We've never had student loans and all (federal or otherwise) taxes have been paid. A little research on CAIVRS resulted on in the statement that no-fault bankruptcy will cover the FHA foreclosure and would keep the individual(s) off the list. Our application has been at the lender for over a week now and I feel confident that they should have already checked CAIVRS for this second application and should have heard the bad news by now.

Keeping our fingers crossed . . .

[tobee43]

Thanks, this wait is tough. About this CAIVRS issue; this is the first time I've heard of this but I appreciate the education. I have to imagine that this would be the first or one of the first checks a lender would perform for an FHA loan application. The only thing that I think that could have put us on the list would have been the foreclosure on our previous FHA mortgage. We've never had student loans and all (federal or otherwise) taxes have been paid. A little research on CAIVRS resulted on in the statement that no-fault bankruptcy will cover the FHA foreclosure and would keep the individual(s) off the list. Our application has been at the lender for over a week now and I feel confident that they should have already checked CAIVRS for this second application and should have heard the bad news by now.

Keeping our fingers crossed . . .

it was the lender who gave me the phone number and told me to call after we had completed the application. no, that is not correct in reference to a "no-fault" bk and being on or off the list.

we had what you refer to as a no fault BK, chapter 7 no assets, is what i think you mean. we also surrendered the home. the mortgage was an FHA with PMI one would like to think they were paying that PMI for a reason, so such animal. ok so the lender never foreclosed on the property it's still there in our names yet we are on that list until early 2016. if you foreclosed previously on an FHA loan most likely your name will be on that list. you can call FHA and find out before you go through all this and at the last minute it is decided they are denying your loan based on the fact you are on the list.

since we never were foreclosed on we tried to get the bank to move so we could get our clock ticking, however, now we find out it didn't matter. chase never put a claim into FHA to collect on the PMI. i know this since the FHA told me directly the only way a lender can collect from us is first to foreclose on the property after that has taken place the lender submits to FHA the difference between what they rec'ed if anything at the foreclosure and then the FHA will pay on the claim, one then is put on the CAIVARS list from that point on for X amount of years. i didn't know this either until recently when we are getting ready to buy a home.

best of luck to you! it will all work out!

[JacaG]

13

Request for Waiver or Resolution of CAIVRS Indicator
In accordance with Handbook 4155.1, mortgagees are required to screen borrowers through CAIVRS. If CAIVRS screening indicates that the borrower has had a claim paid within the previous three years on a loan insured on the borrower’s behalf by FHA, the lender may submit a request for waiver or resolution of the unresolved CAIVRS indicator.
Prior to submitting the request for waiver or resolution, for loans that meet the requirements found in this Mortgagee Letter, the DE underwriter must:
 fully underwrite the application to determine all other eligibility requirements have been met; and,
 approve the loan subject to additional conditions.
On the direct endorsement approval, (HUD 92900-A page 3), indicate in the Additional Conditions under “Other:” “Subject to CAIVRS indicator resolution by FHA.”

I got this off the HUD website, the mortgagee letter 2013-26.

[JacaG]

I just started the process of trying to get approved through this program, the mortgage broker hasn't done any of these loans yet so I don't have any info, I just gave him some initial information and I haven't heard anything yet. The Mortgagee Letter on the website has good information to at least start gathering all the info they will need for the lender.

[tobee43]

jacag, right! actually those that filed bk and include their mortgages due to job loss etc shouldn't even be on the CAIVRS list! i have read tale after tale from those trying to get their names removed from that list.

i found out to late that the lender should have had us write a letter about the terms of our bk and we would have been removed. at this point i know we will be on it until 2016, and frankly i'm fed with all of these controlling issues, they pick and chose whom they are going to help. however, one can go it alone through FHA and get themselves off the list which only clears out monthly, so if you are in a tight spot be prepared to wait a bit to get removed.

if i was preparing to buy again and needed a mortgage i would check the list myself and do what have to. (we ended up coming up with more cash once again we are bypassing the banks all together as we did with this house), many of these lenders are giving you hope only to find out the final decision is a NO GO since underwriting waits until the end of the process to check the list as opposed to being the very FIRST thing they should do.

if you owe the government anything from the dept of labor to FHA to student loans and you defaulted, you are on that list!

[JacaG]

I will definitely be checking to see if we are on the list, We completed the short sale12/2012, bk7 with mortgage included 12/2010.

[tobee43]

I will definitely be checking to see if we are on the list, We completed the short sale12/2012, bk7 with mortgage included 12/2010.

ones name doesn't get on the list until the government actually issues the actually $$s to the lender for the amount lost. that in itself could take more than a year, but until that moment happens, that's when your clock starts to tick.