CAIVRS – Will This Report Stand Between You and Your Dream Home?

Can a CAIVRS Report Stand Between You and Your Dream Home?

Sudden roadblocks when you are trying to get all your ducks in a row to buy a home can be frightening and disheartening. And, some barriers can be bigger than others and can make it nearly impossible to fulfill your dream of home ownership. The best thing you can do is learn about your personal credit situation and what lenders are looking for. This way, you are prepared before you lose money on mortgage seeking costs and have a better chance of getting approved.

What is CAIVRS and Why Does It Matter?

CAIVRS stands for “Credit Alert Verification Reporting System.” It’s a federal database that keeps track of everyone who has defaulted on a a loan, had a loan foreclosed or is currently delinquent on a debt that is owed to the federal government. Debts that can get you on the list include Small Business Administration loans, Federal student loans, Veterans Administration home loans and FHA loans. If you are currently on the list for bad debt, you are not eligible for FHA mortgages. And, other lenders have also begun using the system and will deny a loan to someone who is on the list.

How Can I Find Out if I Am On the List?

Entries on the CAIVRS database are one of the very first things that a potential lender will look for. So, if you are listed, you will find out right away when you start your search for a mortgage and can avoid paying fees for a loan that you will not qualify for. You can also call HUD directly to find out if you have a loan that is listed. If you have a foreclosure under an FHA mortgage, you will appear on the CAIVRS list for three years after HUD pays the insurance claim to your lender. Because of this, it may be more than three years before the entry disappears; if HUD takes five months to pay, the clock will start counting down then. Also, if you declare bankruptcy and include your home, the bank may sit on the claim before filing.

What If I’m on the List and I Shouldn’t Be?

As with any database, there is the potential for errors. If you had a bad debt that landed you on the list, it’s possible that your entry may not be removed when it is supposed to be. If you find out that you are listed erroneously, you can get off the list by contacting the FHA. The FHA will request documentation showing that your debt is paid or that it is far enough in the past that it should not disqualify you from a loan.

An entry in the CAIVRS database may slow down your progress to owning a home, but, it doesn’t have to be the end of it. Find out when your entry is due for removal. Circle that date on the calendar and start thinking of what can make you an even more appealing borrower in the meantime. Can you save more toward a down payment? Pay down other debts? By looking at your borrowing history as a whole, you can make yourself stronger and increase your chances of getting the loan you want.

Falling Behind on Your Student Loans – Employment Troubles?

Three out of every 10 Americans require professional licenses to do their jobs. And, a high number of those people also completed expensive schooling and went into debt for those careers. But, if they fall far enough behind on their loans, they can wind up with repercussions that make it impossible to work in their chosen fields. The Student Debt Trap

In at least 22 states, borrowers who go into default on their student loans

can lose their professional licenses. People whose jobs require licenses include physicians, attorneys, nurses and teachers. Some states go even further. In Tennessee, Okalhoma, Georgia, Hawaii, Iowa, Louisiana, Massachusetts, Montana, New Jersey and North Dakota, K-12 teachers cannot begin working until they have begun repaying their student loans. Even some individuals who do not work in licensed fields can be affected. In three states, your drivers license will be suspended if your student loans fall into default. In areas with poor public transportation, it makes getting to work legally almost impossible. Many people have little choice but to drive with a suspended license, risking fines, increased insurance costs and even jail. The laws have earned criticism from student debt advocates. Often, student loan payments can total $500 or more per month. By limiting people’s ability to work in the fields that they trained for, state governments make it even more unlikely that they will be able to pay back their student loans. The law has negatively affected many graduates. Almost 70% of people are falling Behind on Your Student Loans. Who go to college will take out a student loan, with average student debt at $33,000. Nearly 14% of borrowers defaulted in 2014. Borrowers in Tennessee, which is one of the states that suspends professional licenses, owed a combined $20 million in student debt. The state has sent over 2,600 suspension notices to workers in the state. Protecting Yourself

Once a professional license is suspended, it can be difficult to get it back. While student loans can go through rehabilitation, many states require a long series of good faith payments before a license will be returned. The best current option is to do all that is possible to avoid going into default. If you are unable to make your full payments on your loan: Contact your lender as soon as possible.

Seek out alternate arrangements. Forebearance can be an option if you feel your financial problems will be short-lived. Otherwise, look into refinancing or alternate payment methods.

If your lender will not work with you, contact the Student Loan Ombudsman. It is required that your lender accept reasonable payments, and the ombudsman can negotiate on your behalf.

Problems with student loans do not have to endanger your financial future. By knowing the law and your rights, you can protect yourself from crippling debt and build a strong foundation to take advantage of future opportunities.