Possible Underwriting Issue...Help!

[guykara]

Hi all,

I was involved in a simple contract dispute back in 2009 in regards to a service I provided for a client. The client was not happy, so we went to court, I lost, I returned their money. Unfortunately, the plaintiff never reported the judgment as satisfied, so it still displays as pending. I've tried many times to contact the plaintiff, in which they won't contact me back.

I've provided proof of payment to the underwriters including a copy of the check that was sent and copy from my bank of her signing the check and depositing it. Even though I mentioned this to my loan officer 6 months ago, now that we're two weeks away from closing, he's mentioning that this may become an issue. Underwriting has not commented on it yet (still waiting to hear back from them on my file) - but I guess my LO is trying to be as proactive as possible right now.

I've contacted the courts and they say I must come into court and prove in front of a judge that the items have been paid. The next available court date they had was in late April.

Should I expect that this will cause an issue with approval? 

[DaveInAZ]

Hard to tell if this will be an issue with the underwriter, they can finicky. To be on the safe side I'd grab that April court date, but plead with the clerk for any available earlier date, and explain your mortgage situation. Having proof of a court date to revoke the judgement might also help your situation with underwriter if it is an issue..

[guykara]

Thanks for the response.

I live 3+ hours away from where I had the case. I'd have to drive there just to file the paper work and miss a day of work. I was really hoping there was another way around this. I've provided plenty of proof to the underwriters proving that this has been satisfied for over 5 years. Not to mention, the original contract was between my business (LLC) at the time and the plaintiff, so it should not even be showing up on my credit report. This is why it was removed from one credit bureau, but I had yet to dispute it with the other two.

It wouldn't be a closing without some drama, right? 

[DaveInAZ]

Well then, two more suggestions:

1- Can you find an attorney near where the court is to take care this for you who won't charge you an arm and a leg? This is straightforward and doesn't require a fancy corporate lawyer, one fresh out of law school can handle something like this.

2- Or, if you were successful getting it removed from one CRA, try disputing it with the other two, should take only a couple weeks.

OK, a 3rd suggestion - if underwriting makes an issue of it, show them you got it removed from one & tell them you're in the process of getting it removed from the other two. But, I recommend doing suggestion 1 or 2, so you won't be bothered with this down the road.

And yes, last minute drama from underwriting seems to be the rule rather than exception these days. They were happy to hand out a mortgage to just about anyone with a pulse back in 2005-2007, Now they make you do a tap dance while jumping through a ring of fire. A little middle ground would be nice.