FHA Connection - How does it work?

[techgirl]

Hi everyone,

I need to understand FHA connection and how it works. I was told that when you go for a loan on a house, FHA assigns a number to your home  and you. Pulte put some entries in our file and then denied the loan. Then they told me - don't worry AmeriFirst wants your loan, they looked over your file. Then AmeriFirst calls and says "no problem", we looked over your file and we aren't as strict as Pulte. I said don't you need to look and work with us? He said no. We didn't hear from him underwriting and now we are jumping through hoops. Then they say, we have a problem with what Pulte put in the FHA Connection. I then called Pulte and Pulte says AmerFirst should be able to overwrite it. They also told me to tell AmeriFirst that if they can't do the loan that we want to withdraw the application. We will then take it back to Pulte and prove we did all the stuff they told us to do - which we did. But if for some reason they deny the loan - is it just to that particular house? Will  we get our earnest money back? Could we try again with another lender for a diferent house - like a resale house? How does this stuff work?

[techgirl]

Okay, I have been searching on the web, this is what I found on a helpful website:

When a lender starts a FHA loan they must apply for a Case Number thru FHA.  Only one case number can be attached to a buyer and property.  Here is how a FHA case number can be an inconvenience to you and your clients:

1. Your buyer applies with one bank/lender but decides to go with another.  The second lender must get the original case number transferred to them.  This can take one day to a week or longer, it depends on how friendly that previous lender is.  I dealt with a large bank that had a case number and took over a week to transfer it to us.  This is important to remember since it could delay your closing depending on how long it takes.
2. Every property also has a FHA case number attached to it.  So if you have a listing and the buyer gets denied the property has a case number.  This is important since any future buyer of your lsiting will need to get that FHA case number transferred.  To make your life easier keep track of the lender contact on all your listings.  This will make life easier when the future buyer needs this information.
3. Any time a FHA loan gets denied, the denial is attached to that case number.  In FHA Connection(FHA's website) there are comments provided by the FHA underwriter on why it was denied.  If your buyer goes to another lender to get approved, the new underwriter must prove how the previous underwriter was wrong or how the loan file has changed.  Meaning an aggressive underwriter can not just override the previous non aggressive underwriter. 

What seems like a small unimportant part of the lending process can actually give you a HUGE headache. 

I have proof that what they put in my FHA case file has been updated with a change in our position. We have our savings and we have not done an overdraft for over 5 months - so wouldn't they be able to overrite what is in the FHA case file?  May a LO or experienced realtor can answer this question?  I don't have a week to transfer the FHA case file to someone! HELP!!! I have written a letter and provided proof to the current LO.... Pulte told me to withdraw my application and get it back to their hands - but Pulte is supposed to be more strict... so consfused and upset.

[techgirl]

AmeriFirst told me they won't do anything with the loan - closing date was supposed  to be 6/12. They told me  to go back to Pulte and have THEM overwrite what they wrote. If they don't how long do we have to wait before we can purchase a home???  We did everything they told us to  do! HELP!!!!

[techgirl]

The owners of Pulte are now working with the owners of AmeriFirst to remove daming comments made by Pulte UW.... this is so frickin' crazy!!!! But itt ain't over yet.... we were told we were more than qualified - it is just the comments made by this UW!

[Anonymous]

I am sure this is frustrating. Sorry you are going through these issues. Hopefully they will get this resolved soon!

[techgirl]

Thank you for your reply. I guess no one else had run into this type of thing. I just spoke with an outside  loan officer and was wondering if we cleared CAIVERS and how the stuff written in FHA Connection shouldn't be holding us back - there has to be more to this that they aren't telling me.... How can I fight that? Going to learn about CAIVERS now.

[PRC]

Here is some information off of FHA in reference to CAIVERS ...http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/sys/caivrs

CAIVRS - Credit Alert Verification Reporting System

CAIVRS may be accessed Monday through Saturday, 8:00 a.m. to 10:00 p.m. US Eastern Standard Time. CAIVRS is not available on Federal holidays. Access to the system is during limited hours because it requires mainframe access.

FHA terminated telephone access to CAIVRS on October 1, 2008. Please read  FHA Mortgagee Letter 2008-18 published on 7/11/08 for more information. FHA will continue to offer access to CAIVRS for HUD approved lenders via FHAConnection. Participating agencies or authorized lending institutions can access CAIVRS via CAIVRS.

To learn more about CAIVRS:

• Frequently asked questions* Including guidance for Internet Access
• Under what legal authority is CAIVRS implemented? 

If you have a question or need further assistance, please email us.

CAIVRS was developed by the Department of Housing and Urban Development in June 1987 as a shared database of defaulted Federal debtors, and enables processors of applications for Federal credit benefit to identify individuals who are in default or have had claims paid on direct or guaranteed Federal loans, or are delinquent or other debts owed to Federal agencies.

 In 1989, the Office of Management and Budget set as a performance goal that certain program agencies and their authorized financial institutions should use CAIVRS to conduct prescreening to determine a loan applicant's credit status with the Federal Government. The purpose of this methodology would enable the program agencies to prescreen their borrowers and to broaden the Federal Government's base in determining an applicant's creditworthiness. Some non-tangible factors are:

• Verifying that loan applicants are not in default or delinquent on direct or guaranteed loans of participating Federal programs as required by
  OMB Circular A -129.
• Providing authorized users with a means to prescreen applicants for Federal credit benefit, to avoid extending benefits to individuals who are
  credit risks.
• Demonstrating to the public the Federal Government's commitment to collecting delinquent debt and the importance of meeting Federal
  obligations.

[techgirl]

Thank you - I found it too. In  that website there isn't a place for consumers to call.  I spoke with another LO and they told me that if I don't want to start over, i just need to ask what else they possibly need and how is it going to help and get a timeline from them - and be aggressive but not too aggressive  because I am at their beckon call.... that is if  I don't want to start over with someone else for another 60 days. I just called our LO and they are trying to sell the loan before they own it to be  sure they don't get it back - they don't want to have to buy the loan back. We were told that we were more than qualified, but they were afraid of buying the loan back - FHA is very stringent....  so  I am waiting... still.....