Judgment Appeared on Credit and Public Records

[Anonymous]

Hello,

I have been approved through Rural Development.  I got all my debt to income stablized and my credit score was pretty good.  I recently had a credit alert from my credit report stating that I had a judgment against me for State Farm Auto Insurance.  I am devestated because I know you can't have a judgment to close on a mortgage loan.  I set up a payment plan with the attorney but the thing is they said they served my paperwork at my parents address (which I haven't lived at  for 7 years).  If I would have known about this judgment, I would have shown up in court to defend myself. The attorney also stated that they wouldn't remove the judgment until the judgment has been paid off completly. I recently sent the courts a motion to vacate the judgment. Please someone help and guide me on the right tracks and procedures on how to get this removed before April 30th.  Also the judgment is for 5K.

[ShanetheMortgageMan]

Not sure how to remove a judgment, but as far as the mortgage lender goes they usually require that you pay the judgment off in full, or if a payment plan has been established, looking for 12 months of payments on it.  Since it is brand new obviously the payment history isn't going to be there yet, but your underwriter may still make an exception if you start a payment plan now.

[mauve]

Sounds like you were not properly served, which is grounds to have it vacated.  However, having it vacated allows them to still come after you.  Contact the court where the judgment is to see how to proceed.  Be prepared to pay in full once you have it vacated.  

[Anonymous]

I sent the letter off certified mail to the Courts.  Does this process usually takes a long time.  I told my loan officer of my situation and she stated since she pulled my credit in Feb. she won't have to pull it again for 6 months.  If disputing this info with the CRA, I getting it removed from them, will they automatically remove it from the Public Record.  Can you tell me exactally what steps I need to do?

[ShanetheMortgageMan]

Usually courts take awhile to respond, could be up to 30 days or even longer.  The court clerk can tell you how long it'll be before the letter is responded to.

With new construction homes (less than 1 year old) credit reports are good for up to 180 days, if you are buying an existing home the credit report is only good for 90 or 120 days.

You should consult in the general credit section on the proper procedures to deal with the judgment.