topic Re: Old judgment has me terrified.... in Mortgage Loans

Old judgement has me terrified....

ewtrw — Thu, 12 Jan 2012 19:07:41 GMT

I am very intent on applying for a VA loan this coming June. My scores are good enough I think(660 range on TU and Exp) The only thing that scares me

is I have a 15000 dollar judgement from 2002 that I have never paid. It is no longer on my credit report though. Just how scared of this do you all think I should be. Thanks in advance for your coments.....

Re: Old judgement has me terrified....

p- — Thu, 12 Jan 2012 19:20:23 GMT

@ewtrw wrote:
I am very intent on applying for a VA loan this coming June. My scores are good enough I think(660 range on TU and Exp) The only thing that scares me
is I have a 15000 dollar judgement from 2002 that I have never paid. It is no longer on my credit report though. Just how scared of this do you all think I should be. Thanks in advance for your coments.....

From what I understand Judgements only remain on your CR up to 7.5 years after issue date... but If I were you I would look up your local laws.

Re: Old judgement has me terrified....

Lel — Thu, 12 Jan 2012 19:26:12 GMT

Though judgments may drop off your credit report, the statute of limitations on judgments is often longer than for collections. 10 years is not uncommon, and in some cases it may be as long as 20 years. In addition, judgments can be renewed, so even if the SOL is 10 years in your state, don't count on it being a non-issue when you look to buy a home.

And even though the judgment doesn't appear on your credit reports, it will be found during the title search and will need to be paid before closing.

Re: Old judgement has me terrified....

cdtotten — Thu, 12 Jan 2012 19:45:50 GMT

+1 to Lel's post. The judgement will turn up during the title search and you will more than likely be required to pay something that large. I would be proactive in trying to get this issue resolved. It will be much worse if you ignore it and it turns up at the very end.

Re: Old judgement has me terrified....

Anonymous — Thu, 12 Jan 2012 23:43:29 GMT

Thanks for posting this OP. I might be in the market to buy a house next year. I am in just about the same boat. I have an unpaid judgment that fell off my report 3 years ago and the statute of limitations is over in my state. So they will make you pay this no matter what? Is there any way to get it expunged if it is past the SoL?

Re: Old judgement has me terrified....

Lel — Thu, 12 Jan 2012 23:55:33 GMT

@Anonymous wrote:
Thanks for posting this OP. I might be in the market to buy a house next year. I am in just about the same boat. I have an unpaid judgment that fell off my report 3 years ago and the statute of limitations is over in my state. So they will make you pay this no matter what? Is there any way to get it expunged if it is past the SoL?

The creditor may renew the judgment - I believe that in some states, judgments can be renewed for a period of time even after it has expired. But sometimes the creditors don't renew the judgments at all. I don't know how a title company or underwriter will look at an expired judgment that hasn't been renewed.

For the OP, $15,000 is a pretty big judgment. If the creditor subscribes to one of the services that alerts it to the presence of new credit activity related to a mortgage application, they might start aggressively trying to collect - in their eyes, if you have money for a mortgage, then you have money to pay your judgment.

Re: Old judgement has me terrified....

Anonymous — Fri, 13 Jan 2012 00:27:17 GMT

Since it was an old judgment (it fell off your report) I would contact them and try to settle for less than 50% of the owed balance. I am not sure of your circumstances but income tax refunds are coming up so maybe you could use it to pay the judgment. Good luck in whatever you decide to do.

Re: Old judgment has me terrified....

StartingOver10 — Fri, 13 Jan 2012 02:09:03 GMT

@Lel wrote:
The creditor may renew the judgment - I believe that in some states, judgments can be renewed for a period of time even after it has expired. But sometimes the creditors don't renew the judgments at all. I don't know how a title company or underwriter will look at an expired judgment that hasn't been renewed.

For the OP, $15,000 is a pretty big judgment. If the creditor subscribes to one of the services that alerts it to the presence of new credit activity related to a mortgage application, they might start aggressively trying to collect - in their eyes, if you have money for a mortgage, then you have money to pay your judgment.

+1000

Judgments don't go away when they drop off your report. The creditors know this. They actually count on the fact that you will eventually buy a property and you will be forced to pay the judgment in order to close. You are much better off negotiating the judgment before you even start to look for something to buy. Once they see that mortgage inquiry, the creditor gets intractable!

Re: Old judgment has me terrified....

p- — Fri, 13 Jan 2012 16:11:46 GMT

@StartingOver10 wrote:
...Once they see that mortgage inquiry, the creditor gets intractable!

All the more reason to opt out. You could try, maybe you'll get lucky. If the judgement holder doesn't know you're buying, and doesn't or can't renew the judgement, you might sail through. I guess it would be a gamble. If you get all the way to closing and make it, you've saved the 15k by not paying the judgement.

It would be smart to check out the laws in your state re: SOL, etc. Find out when or how they can renew, and if you're really at risk. Personally, I would not contact the judgement holder. You can bet as soon asyou reopen negotiations it will pop right back up on your CR. That will pretty much decimate your score anyway, so goodbye mortgage.

Do your homework evaluate the risk, and if you think it's worth it roll the dice and go for the mortgage.

Re: Old judgement has me terrified....

p- — Fri, 13 Jan 2012 16:16:12 GMT

@Lel wrote:

And even though the judgment doesn't appear on your credit reports, it will be found during the title search and will need to be paid before closing.

How does that work? I know a title search looks for leins on the property being transferred, but where would they search for the judgement? If it's not on your credit report, and you don't have a lein on any real property, where do they find it? Are judgements listed on a database somewhere or do they contact all local or state courthouses? The reason I ask is I had one as well that dropped off, and had no problem buying my house.

Re: Old judgement has me terrified....

Anonymous — Fri, 13 Jan 2012 16:27:27 GMT

They do a search of all public records under your name. That includes foreclosures, bankruptcies, and judgments.

The thing is they usually do a search within the county you are going to buy, so if it is different than the county where you incurred the judgment it may not show up. The borrower would still have to diclose it on the mortgage app though.

Re: Old judgement has me terrified....

p- — Fri, 13 Jan 2012 16:51:51 GMT

@Anonymous wrote:
They do a search of all public records under your name. That includes foreclosures, bankruptcies, and judgments.
The thing is they usually do a search within the county you are going to buy, so if it is different than the county where you incurred the judgment it may not show up. The borrower would still have to diclose it on the mortgage app though.

Would have to, or should?

Re: Old judgement has me terrified....

Anonymous — Fri, 13 Jan 2012 18:11:37 GMT

@p- wrote:
@Anonymous wrote:
They do a search of all public records under your name. That includes foreclosures, bankruptcies, and judgments.
The thing is they usually do a search within the county you are going to buy, so if it is different than the county where you incurred the judgment it may not show up. The borrower would still have to diclose it on the mortgage app though.
Would have to, or should?

It's all about character with the "would" or "should" question in my opinion because it specifically ask on the loan form if you have any outstanding judgments. Saying "no" when you do is technically lying so I see it going back to one's beliefs/character.

From my understanding I don't think the judgment can re-appear on your credit report since the time has elapsed. Also if it is able to it would not hurt your credit much due to its age.

If I was in the OP's situation (and I actually was with a discover card) I would contact the creditor/collection agency and set up payment arrangements. I would not get all excited about being a homeowner (and experience the stress of the buying process) to have my dream dashed at the 11th hour due to something I could have handled before hand.

Re: Old judgement has me terrified....

Anonymous — Fri, 13 Jan 2012 19:03:15 GMT

@p- wrote:
@Anonymous wrote:
They do a search of all public records under your name. That includes foreclosures, bankruptcies, and judgments.
The thing is they usually do a search within the county you are going to buy, so if it is different than the county where you incurred the judgment it may not show up. The borrower would still have to diclose it on the mortgage app though.
Would have to, or should?

Would have to. Not doing so is considered mortgage fraud.

Re: Old judgement has me terrified....

StartingOver10 — Fri, 13 Jan 2012 19:44:59 GMT

@Anonymous wrote:
@p- wrote:
@Anonymous wrote:
They do a search of all public records under your name. That includes foreclosures, bankruptcies, and judgments.
The thing is they usually do a search within the county you are going to buy, so if it is different than the county where you incurred the judgment it may not show up. The borrower would still have to diclose it on the mortgage app though.
Would have to, or should?
Would have to. Not doing so is considered mortgage fraud.

Exactly. Its mortgage fraud. That mortgage app you sign has a section in it for declarations (sec VIII) - check here to see: https://www.efanniemae.com/sf/formsdocs/forms/pdf/sellingtrans/1003rev.pdf

The last thing you want to do is lie to your lender.

Re: Old judgement has me terrified....

Anonymous — Sat, 14 Jan 2012 22:51:46 GMT

Is the judgement outstanding if it is past the SOL?

Re: Old judgment has me terrified....

StartingOver10 — Sun, 15 Jan 2012 00:41:05 GMT

@Anonymous wrote:
Is the judgment outstanding if it is past the SOL?

Which SOL are you talking about? The reporting period allowed on the CR?

The time that a judgment is valid varies from state to state. In general, a judgment is good for 20 yrs. Sometimes its 10 yrs with an ability to be renewed for another 10 years. You have to check your state's statutes to see how long a judgment is valid and what the renewal terms are for the judgment.

The above statement doesn't mean that it reports on your credit for 20 years. In fact, people report all the time they "got rid of the judgment from the credit report". But, just because it is cleared from the CR, it doesn't mean that the judgment is gone. A judgment continues to accrue interest as long as it is unpaid whether it is on your report or not. That is why title companies and attorney's offices check the public records to see if you have outstanding judgments - because in many states the judgment can attach to the property as a lien when you buy and it comes in front of the mortgage. That then becomes a huge problem for the first lender - as well as a problem for you.

Re: Old judgment has me terrified....

Anonymous — Sun, 15 Jan 2012 23:34:23 GMT

I had to check this out as I have a judgement from 2002 for $5,000 approx. I searched for Illinois laws on this and found:

"A judgment issued by the Circuit Court of the State of Illinois generally may be enforced for a period of seven (7) years (735 ILCS 5/12-108), and renewed if an action for revival is brought within twenty (20) years after the date of entry. (735 ILCS 5/13-218) It may become a lien on the judgment debtor's real property if it is filed with the recorder of deeds in the county in which land is located. (735 ILCS 5/12-101) Such lien stays with the property for seven (7) years from the date of the Judgment, and may be extended for an additional seven (7) years by revival of judgment and filing of the revival order with the recorder of deeds. (735 ILCS 5/12-101 to 12-104)"

Re: Old judgment has me terrified....

StartingOver10 — Tue, 17 Jan 2012 00:46:20 GMT

Yep...that's why they want the judgement paid before closing.

Re: Old judgment has me terrified....

Anonymous — Tue, 17 Jan 2012 20:59:21 GMT

Here is what I found for Utah:

Statute of Limitations for Renewing a Judgment

The statute of limitations for renewing a judgment is 8 years from the date of the judgment. Utah Code Section 78B-2-311. If the debtor acknowledges the judgment in writing or promises to pay the judgment in writing or makes a payment on the judgment, the statute of limitations is 8 years from the date of the last of those to occur. Utah Code Section 78B-2-113. The judgment creditor can renew the judgment, but must do so before the statute of limitations expires. If the statute of limitations expires after the Motion to Renew Judgment is filed but before the motion is ruled on, the renewed judgment is effective on the old judgment's expiration date even if the renewed judgment is not signed until later.

My judgement was from 07/2002. It fell off of my report after 7 years. I don't know if it has been renewed or not. I don't know if I want to check the public records or not to see if has been renewed.