Judgement question

[DAVE49ERS]

I have a judgement from a company I use to own was served over 2 years ago. It has never reported to any of credit reporting agency. I plan on going for a FHA loan in the fall should I be worried about this? I told the loan officer about this and she told me not to mention when I apply and that all she would say about It. 

[StartingOver10]

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@DAVE49ERS wrote:

I have a judgement from a company I use to own was served over 2 years ago. It has never reported to any of credit reporting agency. I plan on going for a FHA loan in the fall should I be worried about this? I told the loan officer about this and she told me not to mention when I apply and that all she would say about It. 

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Ok, Dave, this is the deal with judgments: there is a separate public record that is checked to see if you have a judgment. That record is checked by the lender prior to issuing you a loan. One of the first things that is ordered by the processor is the title work on the property and the check to see if you have any judgments. The reason the lender checks this is because the judgment may be able to attach to your property, ahead of the lenders mortgage, which can create an issue for both you and the lender.

On the mortgage application there are specific questions asking you if you have any other debt/judgments/bk's etc.  Google 1003 mortgage application and you can read the form to see what is asked. It is mortgage fraud if you don't answer the questions correctly. The entire application and approval process is there to check your ability to pay and your payment history. So if there is any conflict between your answers and what the lender digs up (by checking all their own sources) then it is an automatic denial.

Did you know that the mortgage company will also check to see if you have had an ownership position in any company and they will check the status of the company (active or not)? These are also public records.

Usually, when you own a company, you would have had to give a personal guarantee for repayment. Did the judgment apply only to the company or were you a personal guarantor?

Naturally if the judgment is paid prior to your making application this becomes a non-issue.

[RobertEG]

+1

Additionally, since the court has entered an order that you pay, it is enforceable for a period set by your state laws. In most states, it is ten years, and can be renewed.

While the judgment is enfoceable, your potential risk remains more than just credit reporting and potential loan approval.

The prevailing plaintifff can go back to the court and file a motion, based on your failure to have paid,  that the court now order specific terms for satisfaction of the judgment, such as by ganrishment of your pay.

As an aside, you say that you were "served."  Being served is notice of the trial, and of your opportunity to appear and present any defense.

Are you sure, in view of no credit reporting, that it actually went to trial, and a judgment was awarded?

if unsure, I would first contact the clerk of the supposed judgment court, and review the record of the proceeding to determine its actual status.

[DAVE49ERS]

I going down to clerk office today to get a copy. I will just pay it I don't want any issue to come back and bite when I go for a home loan.

[DAVE49ERS]

As far as the company I have no idea if there more judgements. I was put on the company by my dad with my premission. I am no longer part of his company. Should I be worried about this? This judgement for the company is the only one attached to my name that i know of

[RobertEG]

If the judgment was awarded to the COMPANY for  business debt, the reason that it is not appearing in your personal credit report is that it would not qualify as a reportable item to a CONSUMER reporting agency.

The FCRA relates to reporting on comsumers, and defines reportable information as that which is related to debt for "personal, family, or household purposes."  FCRA 603(d).

Business debt does not meet that definition.

However, as stated, you may still have obligation to make a potential creditor aware ot any responsibility,even though not reported to your personal consumer report.

[DAVE49ERS]

ok got the judgment's today from clerk office it from 2011 it has my name on it and the business name. My dad had a settlement agreement for the judgment but only made 4 of the 10 payment last one in 2011. I had him send a letter to the Judgment company to try and work out a deal once again. I didn't want to involve my name as they have been corresponding with my dad and my name is nowhere else except the judgment. This really blows all I did was sign a paper for the company grrrr oh well just a small road block to home ownership.