Need Advice on Judgment and USDA/FHA Loan Underwriting

[Rvan1961]

I have a question for you all about judgments in general. I realize that I have to rectify this judgment in order to buy a home. Do they often take an offer to PIF? Mine is more than 4 years old and  approx 6.5k and I have never heard a word from them at all. Would you really offer 10% like some have suggested? Can you offer, say 50% of what you owe and make payments for 12 months, then get your loan approved? Sorry, I am just looking to buy a home and have to get this judgment laid to rest for good. God knows if I had the cash, I would pay in Full just to get it done. Any help is appreciated

[ShanetheMortgageMan]

With USDA & FHA the judgment either needs to be paid, or on a payment plan for 12 months and then a lot of mortgage lenders will just include it into your debt to income ratio and not require it to be paid.

[Rvan1961]

Thank you Shane, I appreciate the info. At this point, I don't really have 12 months to show a payment history (even if the plaintiff " Worldwide Asset Purchasing, LLC" allowed me to make payments, which is doubtful). I think I will hire an Atty to try to negotiate a payoff and have them vacate the judgment order completely. I'd like to do this myself, but since this plaintiff has never contacted me in 4 years, me contacting them may lead to garnishment.

Any Great Attorney in the Santa Barbara, San Luis Obispo County  Area that anyone could recommend would be appreciated. I have ARAG coverage in a pre-paid legal plan through work, just need the name of a aggressive atty.

[ShanetheMortgageMan]

Welcome.  I only know of a family law attorney in the SB/SLO area.

[Anonymous]

I am in the same predicament Ryan with the same creditor. I have sent a 10% settlement offer and am waiting to see what their response is. I would like to get this taken care of prior to applying for the USDA loan. Is this the best avenue Shane or can I submit the app while trying to settle this debt?

One more question, does anyone know what bureau USDA pulls from? In Ny?

Thanks!

[Rvan1961]

Keep us updated and I wish you the best of luck with both the settlement and getting your loan Let me know how they treat you.

[ShanetheMortgageMan]

It always looks better if you approach a mortgage lender with a paid judgment than an unpaid judgment.

If you are going with a mortgage lender, they'll pull all 3 bureaus.  If you are applying Directly with USDA, I am not certain if they pull just 1 or all 3, if they do pull one, I suspect it'd likely be Equifax.

[Anonymous]

Thank you Shane and Ryan.

It really has me extremely nervous about the documentation stating clearly that there has to be 12 months under the belt of the paid judgment. I really do not want to wait that long.

[ShanetheMortgageMan]

You can always apply earlier for a pre-approval and see, worst that'll happen is you won't get the loan.  I'd wait until there has been at least 3 months of payments.

[Booner72]

Hi, there.  I also had a judgment that my LO said had to be paid as a condition of the pre-approval.  It was for 1900 initially but after fines and fees I ended up paying 2500.   I had 13 months of ontime payments on that judgment, but ultimately had to borrow the money to pay it off as a condition of the loan.  Hopefully it was worth it (I still don't know until she pulls my credit again after the bank approves our offer).

Good Luck.