www.hudclips.org U. S. Department of Housing and Urban Development Washington, D.C. 20410-8000 June 28, 1993 OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL HOUSING COMMISSIONER Mortgagee Letter 93-17 TO: ALL APPROVED MORTGAGEES SUBJECT: Credit Alert Interactive Voice Response System (CAIVRS) Updated Expansion Information The purpose of this Mortgagee Letter is to provide revised information about the CAIVRS system, that we implemented by Mortgagee Letter 92-31 , dated September 17, 1992. As previously indicated, the CAIVRS is a system which enables both the Government and participating lenders to receive an early warning that a potential borrower for a loan to be guaranteed by the Federal Government has defaulted on a similar loan in the past. Applicants for HUD/FHA-insured mortgages that have defaulted on Title I, Title II, and Section 312 loans are not eligible for insured mortgages unless the default was caused by extenuating circumstances as provided in Mortgage Credit Handbook 4155.1 Rev. 4, paragraph 21-4c. The Department has expanded the CAIVRS database by including default data on guaranteed loans issued by other Federal agencies (i.e., United States Department of Agriculture (USDA), Small Business Administration (SBA), Department of Veterans Affairs (DVA), and Department of Education (ED)). Because it now includes default information on Single Family FHA insured loans (Title II), Home Improvement and Mobile Home insured loans (Title I), Section 312 loans, USDA/FmHA loans, SBA loans, DVA loans, and ED loans, the method to access CAIVRS and the messages lenders will receive from CAIVRS have been modified. This letter again provides lenders with revised instructions on how to access CAIVRS and to handle and/or resolve disputed information. (see Enclosure I). Enclosure II identifies the names and/or the various points of contact for any questions you may have regarding default information for a specific program area. Although Enclosure II identifies names, the system now automatically provides the telephone number for the point of contact regarding any default information received. Please advise the applicant to call the point of contact provided by the system. _____________________________________________________________________ If there are any additional questions on this Mortgagee Letter, please contact the Control and Analysis Division, attention, Mary Felton, the overall project coordinator for CAIVRS or Patricia Moss. Mary can be reached on (202) 708-4256, or facsimile number (202) 708-3698. Patricia can be reached on (202) 401-2637, with the same facsimile number. Very sincerely yours, Nicolas P. Retsinas Assistant Secretary for Housing - Federal Housing Commissioner Enclosures _____________________________________________________________________ ENCLOSURE I A. CAIVRS PROCEDURE The interactive voice response function provides lenders with the ability to use a touch-tone telephone to access CAIVRS for instant voice response of client credit information. The telephone number for CAIVRS is 703-391-1400, and its hours of operation are Monday through Saturday from 9:00 a.m. to 9:00 p.m. Eastern Time. Please note that this is not a toll-free number and that a touch-tone telephone must be used. CAIVRS operates in the following manner: 1. The incoming call will be answered and the System will recite this salutation message: "Welcome to the HUD voice response system. To access the Credit Alert System, press 1. To access the Line of Credit Control System, press 2. If you have completed your call, press Zero. Thank you." 2. Enter 1. The system will respond: "You have reached the HUD credit alert system. Please enter your credit alert access code and then press pound." NOTE: The CAIVRS system will only allow one second attempt to enter an access identification number. If a valid access ID is not entered on the second try, the session will be terminated. 3. The system will then determine which type(s) of loans the caller is authorized to process. If the caller is authorized to process only one kind of loan, the system will by pass the next step. If the caller is authorized to process more than one type of loan, CAIVRS will, depending upon the types of loans the caller's I.D. is authorized to process, prompt the caller to respond to two or more of the following prompts: "If you are processing a HUD Title I loan, press 1, or if you are processing a FHA Single Family mortgage loan, press 2, or if you are processing a HUD 312 LPA, press 3, or if you are processing a Veterans Affairs loan, press 4, or if you are processing a Farmers Home Insured loan, press 5, or if you are processing a Rural 1 _____________________________________________________________________ Development Administration loan, press 6, or if you are processing a Education loan, press 7, or if you are processing a Small Business Administration loan, press 9, and then press POUND." 4. The system will respond: "Please now enter applicant's Social Security Number and then press star or Tax Identification Number and then press pound." The System will receive the nine digits and symbol entered by the lender and ask for verification with the message, "You have entered social security number SSNSSNSSN or tax identification number EIDEIDEID, please enter 'Y' if this is correct, or 'N' if not correct." "Y" if correct, otherwise enter "N" and re-enter applicant's identification number followed by the symbol. 5. If the social security number is found to be that of a borrower who has a claim, foreclosure or default under HUD Title I, HUD Title II, HUD Section 312 loan, USDA/FmHA loan, or SBA loan, or DVA loan, or ED loan, the System will read all case codes to determine which of the following messages to recite: o "THERE IS A FORECLOSURE ON THIS BORROWER." o "THERE IS A CLAIM ON THIS BORROWER." o "THERE IS A DEFAULT ON THIS BORROWER." o "THERE ARE MULTIPLE CASES ON THIS BORROWER." The System will then recite the HUD/FHA Title I, HUD/FHA Title II, HUD Section 312, DVA, USDA/FmHA, SBA, or ED case numbers on these claims, foreclosures, or defaults have occurred, using the following format for messages, as appropriate: o "HUD TITLE I CLAIM nnn nnn nnn." o "HUD TITLE II CLAIM nnn nnn nnn." o "HUD TITLE II DEFAULT nnn nnn nnn." o "HUD 312 DEFAULT nnn nnn nnnn." o "HUD 312 FORECLOSURE nnn nnn nnnn." o "DVA DEFAULT nnn nnn nnn." o "USDA/FmHA DEFAULT nnn nnn nnn." o "ED DEFAULT nnn nnn nnn." o "SBA DEFAULT nnn nnn nnn." The case number will be followed by the point-of-contact referral message "For information, please call area code nnn-nnn-nnnn". The number will be spoken slowly to facilitate recording by the caller. If no match occurs, the System will recite the message, 2 _____________________________________________________________________ "There are no claims, foreclosures or defaults for this borrower." 6. The System will then generate a Credit Alert Confirmation Code and will recite the message, "Credit Alert Confirmation Code is . . . . . . . . . " This confirmation code is maintained in the automated system to specifically identify a particular inquiry. The confirmation code should be retained by the caller for the same purpose. 7. If the caller is authorized to process only one type of loan, CAIVRS will request the caller to respond to one of the following prompts: "If you would like the access information repeated, press 1, or if you would like to enter another applicant for the same type of loan, press 2," (the process is repeated, starting with item #4). 8. If the caller is authorized to process more than one type of loan, CAIVRS will then request the caller to respond to one of the following prompts: "If you would like the access information repeated press 1, or if you would like to enter another applicant number for the same type of loan press 2, or for a different type of loan press 3," (the process is repeated, starting with either item #3 or item #4). 9. The System will now instruct the caller: "To return to the main menu press ZERO. If call completed, you may hang up now. Thank you for using the HUD voice response system." The information provided by CAIVRS is for the lenders and the borrowers use only. Any other use is unauthorized. The System is to be used only by those persons who have received authorized responsibility to pre-screen Federal loan program applicants for credit worthiness. The social security numbers of all applicants must be entered into CAIVRS (except for the transactions set forth in paragraph 2-4C of HUD Handbook 4155.1 Revision 4) to see if there is a default or claim against any of them. During the face-to-face interview lenders should obtain information from the borrower(s) on any current or prior HUD insured Title I, Section 312 loans, HUD Title II mortgages, DVA loans, USDA/FmHA loans, or ED loans, or SBA loans. 3 _____________________________________________________________________ B. Handling and/or Resolving Disputed Information If an applicant's social security number is matched against a default, foreclosure, or claim in CAIVRS, and the applicant disputes the accuracy of the information, there are two ways to handle and/or resolve the issue. It is the policy of HUD/FHA Programs (i.e., Section 312 loans, Title I and Title II-Single Family) that the approved lenders continue to work with the applicants by calling the appropriate point of contact to resolve any disputed information about these programs when the applicant's SSN is matched. However, when the disputed information is the result of a non-HUD/FHA credit agency(s) defaulted information, (i.e., SBA loans, DVA loans, USDA/FmHA loans, and ED loans), the applicant, not the lender, should call the assigned point of contact(s) for resolutions. When a credit agency determines that the applicant is correct about the disputed information or when an applicant satisfies the credit condition, the agency will update its own system of records, and will also suppress the SSN on the claim/default data in CAIVRS. The suppression will occur on-line by the assigned person(s) for the credit agency. At this point, the new loan application process can proceed. The application forms for HUD/FHA Programs (i.e., Section 312, Title I and Title II-Single Family) request all applicable information, including an applicant's SSN. The applicant is informed at the time of applying for a guaranteed loan that HUD may conduct a computer matching to verify the information to Federal, State, and local agencies when relevant to civil, criminal, or regulatory investigations and prosecutions. It will not be otherwise disclosed or released outside of HUD, except as required and permitted by law. The information will be used to determine an applicant's credit worthiness. The privacy of individuals will be protected by strict adherence to the provisions of the Privacy Act. The Department will periodically validate the usage of the CAIVRS System to ensure that the use of the data by lenders is limited to prescreening purposes as intended, and not used for any other disclosure reasons. Potential abuses of the confidentiality of the data will be punishable under the Privacy Act. 4 _____________________________________________________________________ ENCLOSURE II If an applicant's social security number is matched against a default, foreclosure, or claim in CAIVRS and the applicant disputes the accuracy of the information obtained from the point-of-contact, or does not receive satisfactory assistance from the point-of-contact, additional assistance may be obtained from the contact names listed below. The HUD/FHA lender should make the contacts for the programs numbered 1, 2 and 3. Below is a listing of the various points of contact for the programs included in CAIVRS. 1. HUD Title I Please refer to the Local Title I Debt Management Centers. 2. HUD Title II Please refer to the Local HUD Field Offices. 3. Section 312 Loans Bill Hanson Department of Housing and Urban Development Rehabilitation Loans and Homesteading Division, Room 7168 451 Seventh Street, SW Washington, DC 20410 Telephone: 202-898-1000 "REFER TO CAIVRS INFORMATION" 4. SBA loans Walter Intlekofer Small Business Administration Operations Assistance Branch 409 Third Street, SW Washington, DC 20416 Telephone 202-205-6481 5. USDA/FmHA loans Yuhauntus Eddy or Esther McQuaid USDA/Farmers Home Administration Quality Assurance Branch 1520 Market St., FC-351, Room 3519 St. Louis MO 63103 Telephone: FTS 262-2492 Commercial: 314-539-2492 6. DVA loans Department of Veterans Affairs Debt Management Center Bishop Henry Whipple Federal Bldg. Fort Snelling St. Paul, MN 55111 Telephone: 1-800-827-0648 7. ED loans Please refer to the ED Regional Offices.