Judgements

[MOMO30]

Hello I have 2 judgements that was put on my report in 2005 one in 2006.
One for $1,810 the other $3,800 they both have dropped of my report I'm about to begin the
Mortgage process. I wanted to know how should proceed with these judgements
Will they need to be paid or will they not show up ?

[StartingOver10]

They show up in the public records. Both the lender and the title company check the public records for judgments and tax liens against you. Right in the mortgage application it will ask if you had a judgment within X years so you have to disclose the judgments anyway.

You are better off negotiating a payoff and as part of the negotiation have the judgment lien holder vacate the judgment. It is better for you in the short run and the long run. TIP: You can do a better job negotiating if the lienholder does not know you are going to buy a home. If they find out you want a mortgage, they aren't very negotiable at all.  If they see you made application for a mortgage, then they assume they have you between a rock and a hard place and will want every dime. So don't app for a mortgage until you get the judgments satisfied or vacated.

If you can't get them to vacate it, make sure that they record a Satisfaction upon payment so the judgments won't be an issue.

[prince1969]

The title company checks for liens on the property that you are buying. Now if you were selling, then your liens would be an issue. The lender looks at your credit report and there may be additional search as well. It is quite possible it won't show up on their radar. There was a judgment against me. Told the loan officer about it. He said he would need proof it was paid off but he never put it in the paperwork. I paid it off anyway before applying but it hasn't been an issue.

[Mike_B03]

You will need to at least be on a payment plan for the judgments and then the amount of payments already required to have been made depends on the lender. I've heard some require at least 6 months of payments while others dont require any payment history, but you have to show you have setup a payment plan.

[StartingOver10]

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@prince1969 wrote:

The title company checks for liens on the property that you are buying. Now if you were selling, then your liens would be an issue. The lender looks at your credit report and there may be additional search as well. It is quite possible it won't show up on their radar. There was a judgment against me. Told the loan officer about it. He said he would need proof it was paid off but he never put it in the paperwork. I paid it off anyway before applying but it hasn't been an issue.

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I wouldn't count on it.

With the new fraud protections put in since 2008 mortgage meltdown, the lenders do check the public records routinely. It isn't a good idea to make application without disclosing the judgments and it is far better to handle them before you app. It could be that you are in an area of the country that wasn't hit hard by f/c's so your originators don't check, but I would think that would be rare and I certainly wouldn't count on it. Besides, there are all kinds of checks and double checks performed by the processor and underwriter of which the consumer is never informed. These checks are done in the normal course of business and don't have to be discussed with the consumer because the consumer gave their permission when they signed the application and all the disclosures.

[MOMO30]

Thanks everyone I emailed the banker I interned using and I explained they are not on my cr
He said we will deal with it when that time comes

[prince1969]

Well, unless you are an underwriter, it's hard to say what they do or not especially when you say it's not often known. Even the loan officer stated to deal with it IF or when it becomes an issue.

[StartingOver10]

No, I'm not an underwriter.

I'm a Realtor for over 30 yrs. I know it happens because I have seen buyer clients of mine turned down when they didn't disclose outstanding judgments that were not on the credit report. Both the lender and the title company complete a public records search.

Also, as part of the public records search, the lender will check to see if the buyer has other property in the area if they are seeking another primary loan. Could this be just in Florida where I am located? Possible, but not likely.

I am in communication with the buyers lender regularly. The goal is to help the buyer get the mortgage so if there are outstanding issues, then to get the issues handled prior to making an application so the process goes smoothly once the buyer is in contract. Some agents help their buyers with this process (team approach), others back away and let the buyer do it without any help at all.