Question for Dallas or Shane, Please help.

[samwise7]

As a condition for approval, I have to satisfy a judgement appearing on my credit report.   I contacted the creditors attorney and they agreed to accept a payment for less than the judgement amount.  However when I received their letter today it says the following. 

"Please be advised that my client has agreed to accept the sum of $3,500 as settlement in full on the above captioned account.  This offer is good until May 22 2009.  Our client is accepting this settlement with the condition that there is no sale of real property or re-financing of a mortgage pending.  Either of these circumstances will render the acceptance of this settlement null and void. 

Upon receipt of cleared funds, the Warrant to Satisfy/Satisfaction of Judgement, will be forwarded to the Court for filing.  A filed copy of the same will be provided upon receipt from the court......"

I basically read this as them wanting to make sure I'm not getting a large sum of money for either selling a home or refinancing which I am not, and I called the attorney back to make sure that this so, and they told me they did not care that I was about to purchase, but do you think that an underwriter will read it this way? 

[Anonymous]

They are basicly saying that they are willing to do a settlement and consider the matter closed as long as you are not selling a house or refinancing a property.  They figure if you have the equity to sell or refi a house right now, they probably could seek a lien on the property and get full value.  With so many rushing to refi these days into lower interest rates, creditors are looking more closely at this even if they have yet to officially file a lien.  So you should be good to go. One thing, it will still show as settled for less than owed just to clarify.  That should be no problem on the loan, just wanted to make sure you were aware of that. 

[samwise7]

Mickie,  Thanks for your response, that is a relief and it's what the attorney confirmed but I was wondering if the underwriter would read it that way, or if it could be misinterpreted and cause the mortgage to blow up.  I really hope it doesn't since this was the only thing standing in the way. 

By the way, I do realize that it will show as settled for less than amount owed, I really wish I could have paid it full.  In either case, the judgement should still drop off in its proper time (7 years) as long Satisfaction of Judgement is filed, correct?

[DallasLoanGuy]

only your loan officer should answer this for you

they can call/email their underwriter and see if this is ok.

the loan officer is your friend... they are the filter between you and underwriting.

[samwise7]

Dallas, thanks, I'll call and keep my fingers crossed.