b. Debt Related to VA Benefits (continued)

Note:  No promissory note is required in cases referred to the Department of Justice, General Accounting Office, or VA Regional Counsel for judicial enforcement.  In such cases, VA will obtain information on the applicant’s debt status from these parties and relay pertinent information to the lender.

VA may find a repayment plan acceptable if:

·   the veteran has been satisfactorily making payments on a repayment plan in effect prior to the lender’s inquiry

·   the veteran’s overall credit history and anticipated financial capacity after the proposed loan is made indicate a reasonable likelihood that the repayment plan will be honored and the outstanding amount of indebtedness is not so large that it would prevent payment in full within a reasonable period (approximately 1 year), or

·   the case involves unusually meritorious circumstances.

Example:

·   Consideration would be given to a veteran with an outstanding credit history and adequate income whose debt balance is too large to be reasonably paid out in less than 18 months to 2 years. 

VA will offer special consideration to a veteran’s claim that he or she was not previously aware of an overpayment of benefits.

c. What is CAIVRS?

CAIVRS is a HUD-maintained computer information system which enables participating lenders to learn when an applicant has previously defaulted on a federally-assisted loan.  The system’s interactive voice response function provides instant credit information.

The database includes default information from the Department of Agriculture, Department of Education, Department of Justice, HUD, Small Business Administration, and VA.

The VA default information included in the database relates to

·   overpayments on education cases

·   overpayments on disability benefits income, and

·   claims paid due to home loan foreclosures.