U.S. Department of Housing and Urban Development Washington, D.C. 20410-8000 August 18, 1993 OFFICE OF THE ASSISTANT SECRETARY TI-425 FOR HOUSING-FEDERAL HOUSING COMMISSIONER MEMORANDUM FOR: ALL TITLE I LENDING INSTITUTIONS Attn: Installment Loan Department SUBJECT: Expansion of Credit Alert Interactive Voice Response System (CAIVRS) Section 201.22(a)(7) of the Title I regulations requires that, as part of the credit examination procedure, the lender must verify whether the borrower is in default or a claim has been paid in connection with any loan obligation owed to or insured or guaranteed by the Federal government. To assist lenders in making this determination, the Department instituted the Credit Alert Interactive Voice Response System, or CAIVRS. CAIVRS has been very helpful in identifying loan applicants who have previously defaulted on FHA-insured loans or mortgages or Section 312 rehabilitation loans. In addition, CAIVRS has proven to be an effective tool for convincing borrowers to pay off their outstanding debts to the Department so that they can obtain additional credit. The Department has now expanded the CAIVRS database to include default data on loans guaranteed by the Department of Veterans Affairs (DVA), the Farmers Home Administration (USDA/FmHA), the Department of Education (ED), and the Small Business Administration (SBA). Because of this additional information, the procedures for accessing CAIVRS and the messages that lenders will receive from CAIVRS have been modified. Attachment A to this letter provides revised instructions on how to access CAIVRS. Please note that, effective October 1, 1993, the telephone number is being changed. Attachment B identifies the person or office to contact regarding default information on each specific program area. In addition, CAIVRS now provides the telephone number of the contact person whenever there is default information for a loan applicant. If you have any questions about the calling procedures, please contact Mary Felton, CAIVRS Project Coordinator, at 202-708-4256, or Patricia Moss at 202-401-2637. Their facsimile number is 202-708-3698. Guidelines for More Effective Use of CAIVRS Based on the telephone calls received by the Department, it is apparent that some lenders are not clear on how the CAIVRS information should be used. You should adhere to the following guidelines in using the system: _____________________________________________________________________ 2 o CAIVRS is to be used only for evaluating the creditworthiness of applicants for Federally insured or guaranteed loans. Any other use is unauthorized. Calls to CAIVRS should be made only by those persons who are responsible for screening applicants for such loans. o It is not necessary to call the contact people listed in Attachment B to verify the default and claims information you receive from CAIVRS. Calls should be limited to those situations where the applicant disputes the information. o Please do not have the applicant call the contact people for the HUD programs (numbers 1, 2 and 3 in Attachment B). The only time that applicants should call HUD is when they wish to repay an outstanding debt. o If the applicant disputes the information on a non-HUD loan (i.e., a DVA, USDA/FmHA, ED or SBA loan), it is the applicant's responsibility to call the contact people listed in Attachment B and seek a resolution of the matter. o If the government agency contact person determines that the applicant is not in default or there is an error in the information provided by CAIVRS, you do not have to wait for the incorrect information to be removed from the system before approving the loan. The case number can be suppressed in CAIVRS by an authorized individual of that agency. The Department is revising its credit application forms for both property improvement and manufactured home loans to include a specific place for recording the Credit Alert Confirmation Code for each applicant. Until these new forms are available, you should enter the Confirmation Code, along with any information on foreclosures, claims or defaults provided by CAIVRS, wherever space is available on the present form. For Further Information If you have any questions about this letter, please write to Robert J. Coyle, Director, Title I Insurance Division, 451 Seventh Street, S.W., Room B-133, Washington, D.C. 20410, or call the Division at 202-755-7400. Sincerely yours, Nicolas P. Retsinas Assistant Secretary for Housing-Federal Housing Commissioner Attachments _____________________________________________________________________ ATTACHMENT A CALLING INSTRUCTIONS FOR CAIVRS Beginning October 1, 1993, the telephone number for CAIVRS will be 301-344-4000 (prior to that date, the number is 703-391-1400). The hours of operation are Monday through Saturday from 9:00 a.m. to 9:00 p.m. Eastern Time. Please note that these are not toll-free numbers and that a touch-tone telephone must be used. CAIVRS operates in the following manner: 1. The incoming call will be answered and the caller will hear: "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." As a Title I lender or loan correspondent, you should enter your 10-digit lender identification number. This is the number which appears on the mailing label with this Title I letter, and consists of your five-digit lender number, plus four zeroes and the check digit. NOTE: CAIVRS will only allow two attempts to enter a valid lender identification number. If a valid lender identification number is not entered on the second try, the call will be terminated. 3. The system will then determine which types of loans the caller is authorized to process, based upon the lender identification number. If the caller is authorized to process only one type of loan, the system will bypass the next step. If the caller is authorized to process more than one type of loan, CAIVRS will 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 an FHA single family mortgage loan, press 2, or if you are processing a HUD 312 rehabilitation loan, press 3, or if you are processing a Veterans Affairs loan, press 4, or if you are processing a Farmers Home Administration loan, press 5, or if you are processing a Rural Development Administration loan, press 6, or if you are processing an 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." _____________________________________________________________________ 2 The system will then ask for verification of the Social Security Number or Tax Identification Number with the message: "You have entered Social Security Number nnn nn nnnn or Tax Identification Number nnn nn nnnn. Please enter 'Y' if this is correct, or 'N' if not correct." Enter "Y" if the number is correct. Otherwise, enter "N" and re-enter the Social Security Number or Tax Identification Number, followed by the appropriate symbol. 5. If the Social Security Number or Tax Identification Number is found to be that of a borrower who has a foreclosure, claim or default on a Federally insured or guaranteed loan, CAIVRS 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 FOR THIS BORROWER." 6. The system will then recite the case numbers on which a foreclosure, claim or default has 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 telephone number of the person or office to contact if the applicant disputes the accuracy of the CAIVRS information. The numbers will be spoken slowly to facilitate recording by the caller. If no match occurs, the system will recite the message: "There are no cases for this borrower." 7. CAIVRS will then generate a Credit Alert Confirmation Code and will recite this message: "Credit Alert Confirmation Code is ....." This Confirmation Code is maintained in the automated system to specifically identify a particular inquiry. The Confirmation Code must be recorded on the borrower's credit application. _____________________________________________________________________ 3 8. 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 then repeated, starting with step 4. 9. If the caller is authorized to process more than 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 number for the same type of loan, press 2, or for a different type of loan, press 3." The process is then repeated, starting with either step 3 or step 4. 10. CAIVRS 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." _____________________________________________________________________ ATTACHMENT B CONTACT PERSONS FOR EACH LOAN PROGRAM If an applicant's Social Security Number or Tax Identification Number is matched against a foreclosure, claim or default in CAIVRS and the loan applicant disputes the accuracy of the information, assistance may be obtained from the sources listed below. For the HUD programs (numbers 1, 2 and 3), the Title I lender should make the contact. For the other programs, contact should be made by the loan applicant. 1. HUD Title I Loans Contact regional Title I Debt Management Centers. 2. HUD Title II Loans Contact local HUD Field Offices. 3. Section 312 Loans William Hanson Dept. of Housing and Urban Development Rehabilitation Loans and Homesteading Division 451 Seventh Street, S.W., Room 7168 Washington, D.C. 20410 Telephone: 202-898-1000 (Refer to "CAIVRS Information") 4. DVA Loans Department of Veterans Affairs Debt Management Center Bishop Henry Whipple Federal Building Fort Snelling St. Paul, MN 55111 Telephone: 1-800-827-0648 5. USDA/FmHA Loans Yuhauntus Eddy or Esther McQuaid USDA/Farmers Home Administration Quality Assurance Branch 1520 Market Street, FC-351, Room 3519 St. Louis, MO 63103 Telephone: 314-539-2492 6. ED Loans Contact Department of Education Regional Offices. 7. SBA Loans Walter Intlekofer Small Business Administration Operations Assistance Branch 409 Third Street, S.W. Washington, D.C. 20416 Telephone: 202-205-6481