topic Re: Any success stories with Judgment & FHA loan? in Mortgage Loans

Any success stories with Judgment & FHA loan?

Anonymous — Fri, 04 Jan 2013 21:14:16 GMT

Our loan is in Underwriting but I am really stressing about a Judgment that I have against me from an old debt. I disclosed the Judgment with the loan officer early in the process and have setup a payment plan which is already factored into the monthly debt-to-income ratio (also sent a copy of the payment plan arrangement to the loan officer).

The judgment wasn't brought up by Underwriting at all so I felt ok about it, but now they asked for a letter of explanation for a non-sufficient funds fee which was caused by the judgment creditor putting a hold on our bank account before setting up the payment plan.

My fear now is that the Underwriter was actually not aware of the judgment since they didnt' ask about it (maybe the loan officer never told them?).

Has anyone had success with getting a mortgage loan with a Judgment agains them? Would love to hear some success stories to calm my nerves.

Re: Any success stories with Judgment & FHA loan?

jandj80 — Fri, 04 Jan 2013 21:17:34 GMT

We don't have any owed judgements at this time, but do have one from 2009 that we paid back then, and we are currently in underwriting as well. However, it is my understanding that if it is in a repayment plan, and there is room for it in your DTI, you are good to go. If its medical, they really don't worry much about them at all.

Re: Any success stories with Judgment & FHA loan?

Anonymous — Sat, 05 Jan 2013 03:58:54 GMT

As mentioned if you are in repayment plan and submitted should not be an issue. As long as within DTI ratios as mentioned.

Re: Any success stories with Judgment & FHA loan?

Kay_Cee — Sat, 05 Jan 2013 16:15:52 GMT

You should be OK if it was disclosed and the payment arrangement is already factored into your DTI. I closed on my FHA mortgage with a paid judgment from 2007 and a current payment plan with the IRS for back taxes. The key is having an established, on time payment record. That being said, you don't stop feeling the stress until you actually get the clear to close.

Re: Any success stories with Judgment & FHA loan?

Anonymous — Sat, 05 Jan 2013 17:01:45 GMT

@Kay_Cee wrote:
You should be OK if it was disclosed and the payment arrangement is already factored into your DTI. I closed on my FHA mortgage with a paid judgment from 2007 and a current payment plan with the IRS for back taxes. The key is having an established, on time payment record. That being said, you don't stop feeling the stress until you actually get the clear to close.

The established, on time payment record may be a problem if they ask for it because I've only made 1 payment so far since the payment plan was just setup a month ago. By the time we are supposed to close in 6 months though, there would be a record of 7 payments though, so if needed, maybe they could make it a condition of closing to show the payment history.

I sent the letter of explanation and got back a reply of "This will work fine". It's still on the list of conditions in the online status though so not sure if it's resolved or not. I absolutely hate the not knowing! It's been 2 months since we started this loan process and I don't know when it'll be finally be over and we have our commitment letter.

Re: Any success stories with Judgment & FHA loan?

tooleman694 — Sat, 05 Jan 2013 17:16:35 GMT

If they are looking for an excuse to kill it, this will be it.

Hopefully the underwriter is just trying to wrap this one up.

When I got denied in underwriting, it was with something just like this. ruined my year.

Re: Any success stories with Judgment & FHA loan?

Anonymous — Sat, 05 Jan 2013 17:56:57 GMT

@tooleman694 wrote:
If they are looking for an excuse to kill it, this will be it.

Hopefully the underwriter is just trying to wrap this one up.

When I got denied in underwriting, it was with something just like this. ruined my year.

I like to think that I wouldn't be that upset, but I'm probably fooling myself. When we went into this, we thought "It would be a miracle if we get a loan, but let's try, what do we have to lose?" because of our credit, so the whole time we've been very cautious and tried not to get excited. It sort of ruined the design center experience when we went to pick all the options and finishes because that was very early on and in the back of our minds, we almost felt that we were wasting our time. The further we make it along though, the more optomisic we have become.

Hopefully they don't want to kill the deal, and I like to think that it's also in their interest to try and make it happen since the builder and the mortage company are on in the same, they have more to gain than if the mortgage company was a 3rd party.

We have both said that if we get denied, it will be a learning experience, we'll see why we were denied, get it fixed, and try again at a later time.

Re: Any success stories with Judgment & FHA loan?

tooleman694 — Sat, 05 Jan 2013 17:53:48 GMT

You and I think alike.

We were denied in the 11th hour in underwriting on closing day.

We found the problem and fixed it. We are closing in April and im still freaking out lol.

Re: Any success stories with Judgment & FHA loan?

Anonymous — Sat, 05 Jan 2013 18:00:17 GMT

@tooleman694 wrote:
You and I think alike.

We were denied in the 11th hour in underwriting on closing day.

We found the problem and fixed it. We are closing in April and im still freaking out lol.

Hey Tooleman I sent you a PM.

Re: Any success stories with Judgment & FHA loan?

tooleman694 — Sat, 05 Jan 2013 18:01:26 GMT

PMed you back.

Re: Any success stories with Judgment & FHA loan?

Anonymous — Sat, 05 Jan 2013 18:14:16 GMT

@tooleman694 wrote:
PMed you back.

Haha me too. This site needs a better notification system for private messages, that little (1) next to the envelopment isn't very noticeable unless you actually look for it.

Re: Any success stories with Judgment & FHA loan?

tooleman694 — Sun, 06 Jan 2013 04:59:07 GMT

So any idea when you will get the clear.

Re: Any success stories with Judgment & FHA loan?

Anonymous — Sun, 06 Jan 2013 06:57:10 GMT

In 6 months if all goes well. House construction hasn't even started yet and it's not scheduled ot be done until June.

Re: Any success stories with Judgment & FHA loan?

sharpie — Sun, 06 Jan 2013 14:42:37 GMT

i am sending you a PM so please look for it

Re: Any success stories with Judgment & FHA loan?

tooleman694 — Sun, 06 Jan 2013 17:24:29 GMT

I see what is going on. We did the samething, went all the way thru underwriting before they started building. Once underwriting came back clear they started building, we close in April.

Re: Any success stories with Judgment & FHA loan?

Anonymous — Sun, 06 Jan 2013 17:49:00 GMT

You will go through UW again, stay clean, no new loans, etc etc...

Re: Any success stories with Judgment & FHA loan?

Anonymous — Sun, 06 Jan 2013 18:13:25 GMT

@Anonymous wrote:
You will go through UW again, stay clean, no new loans, etc etc...

Yep, was told the same thing on another forum. Here is what someone else said:

It really depends when the house is ready. For new construction, you need to be prepared for two full underwriting processes, and here's why: Your credit documents have a limited shelf life. Your credit report most likely is only valid for 90 (maybe 120 days). In your "loan commitment" there should be a date the documentation starts to expire. So while your loan approval should hold up provided nothing changes: your deposits continue from your self employment, your bank statements are relatively the same and your new credit report doesn't reflect new debt and so on and so on. When you have your pre-drywall meeting with the builder, the lender will start to update your file and order the appraisal. It will feel like they have never seen your file before - they will need to re-acquaint themselves with it and make sure you are ready for the second loan submission........like make sure they have a copy of the options check you gave the builder and the statement showing it clearing and so on. Get yourself a big expandable file.......put everything in there......copy every check you deposit that is not payroll......don't make any unilateral decisions if you aren't sure of something. Call your lender first. You'll be fine.......but you do get to repeat the process.

Re: Any success stories with Judgment & FHA loan?

tooleman694 — Sun, 06 Jan 2013 18:17:32 GMT

Yup we go back in underwriting in March, my scores were around 680 when they ran the first time. Since iv paid off some credit cards to get my util really low, one collection got removed and several accounts hit the one year mark and no new INQs since. Crossing my fingers I hit 700 when they run me again.

That collection that came off was my most recent baddie, but still kind of old it was opened in 2009. Hoping maybe ill get a couple points getting it gone.

Re: Any success stories with Judgment & FHA loan?

Anonymous — Sun, 06 Jan 2013 18:24:03 GMT

If it was the last collection and newest collection in my opinion you will have a decent boost. Probably over 700, but depends on what else in on your reports as you already know.

Re: Any success stories with Judgment & FHA loan?

tooleman694 — Sun, 06 Jan 2013 18:28:40 GMT

I have one collection left, could not get it removed no matter what I tried. It falls off sometime this year but after we close on the house.

Only other baddie I have is when I defaulted on my student loans 5 years ago and had to get em rehabbed.

Other then that im all good.