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Buying a New Home


borg100
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I live in California and I've been reading this forum for months and this is my first post. I hope I'm in the correct section. I had a judgment on my credit report and followed steps to get it removed from my "credit report" and this month it was removed. I got the judgment in 2001 and is now removed from my credit report only.

I applied for a home loan and was approved. I was wondering since the judgment was removed from my credit report...can the escrow company find out that I still have the judgment against me? Or am I free and clear?

Any help will be appreciated.

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DocDon Why the heck would the Escrow company find out about a judgement that is not related to the Purchase of the Home that escrow has been opened up on?....They have No reason to look for anything against the Borrower....Only the Property that is being purchased in the Way of a "Title Report" and then of course being witness to final closing docs for the Loan on the property...If the Judgement does not show up on your credit report and the Mortgage Company already approved you for a loan and already evaluated your Credit you should be fine.....Unless under the following 2 conditions:

1. The lender re-pulls your Credit right before you go to close and the judgment shows up at this point or....

2. On the HMDA declerations on the Last page of the Mortgage Application you answered Yes to having Outstanding Judgements...and the lender just missed it at first but now wants further clarification...

But again if you are Fully approved and your Loan has been fully underwritten by the Lenders mortgage Underwriter and you have a "clear to close" I would say with about 95% certainey that you should be fine....

The only time judgements really matter when Purchasing a home is when they show up on your Credit report and when the Lender Requires you to pay them off prior to close....

Now when you go to Refinance your Property and if by some chance the Judgment shows up at that point you might have to pay off the judgement from the proceeds of the refinance before anything else...Especially if a Lien is attached against your property due to the Judgement...When A lien is attached it is a pain in the but to remove....Not only do you have to prove that you satisfied the judgement but then you have to make sure the Lien is Properly removed and recorded that way....Not FUN

I am a Loan Officer for a Major Mortgage Bank that is licensed in all 50 states...If you need any pointers feel free to PM me...

Thanks

TW

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when you buy a home a title search is done, that means any public records concerning the seller or his property and you are uncovered by methods not related to credit reporting.

I believe this must be a state to state case by case status if you say this is so....I have never experienced an escrow and title company doing a title search on the individual only the property that is being purchased...

A judgement has more power when there is something to attach a lien to, Like a home...If a Borrowere is a new home buyer who has been previously renting and they put a contract on a property and escorw is opened up.. a title search is done on the property to make sure the property has a clear title..Escrow is not in the business of doing back ground searches on "individuals" They only check status of Property beit "real" property or "personal" propety.

If a borrower does happen to have a judgement that does not show on his credit report and he qualifys for a mortgage based on this credit than It would be very unlikely that an escrow/ title company would Kill a deal because they did a search on the individual like in court records or public recorded judgements and listed this info on a title report...A judgement shows up in a title search when there is a lien attached to the property, but this does not effect a new buyer....unles of course the property he is buying has a lien attached to it....

If you have a judgement and it does not show on your credit and you qualified for a mortgage I would say you are safe....But it is worth calling an escrow / title company to find out exactly...Again things vary from state to state when it comes to Escrow and Title procedures...

TW

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I have experience this. I asked why the Title company wanted my SSN. He said the do a public records search to see if I have any judgements. I was like okay (knowing there weren't any).

Yes, But were you selling a property or buying a new home. If you were selling they were probably checking to see if the property you were selling had any liens against from a judgement with your name associated with it...

If you were buying and did not previously own and if down payment money was not coming from the proceeds of a sale of property, I would not understand the point...Unless the judgment is actually attached to something like your bank account or property you are free to do what ever you wish to do with the money in your account or property you own without having to worry about a judgement. Of course unless the credit implicataions it has if it reports on your credit....

I have never experienced a new home buyer who has an outstanding judgement that does not report on ones credit report show up un a Title report...Becuase the Title report is a report of the Property being purchased not the individual doing the purchasing...If the underwriter grants an approval on the loan regardless if the judgment shows up or not then the Escrow and title companyt can not come in and say...: "You can't buy this property untill you satisfy a collections judgement for a 5 year old judgement on a computer you stoped paying on" the title and Escrow company just is not in the business of doing that....The judgment has to be attached to something in the form of a lien...

IF you do not own property then there is noting to attach it to...If you qualified for a mortgage they you buy a property even if you do have a judgement if you were approved for the Mortgage...

Now it is possible for a lien be attached to the new home you just bought based on that Prior judgement...Then all that means is that if you sell or refinance that part of the procedds need to be applied to satisfy the judgement...

Again Rules and laws may be different from state to state but I know in all the wester states that I have done loans in and all the Escrow and title companies I dealt with from each state none have ever Forced a borrwer to pay a judgment before they can buy a new home if that judgment is not attached to some property or asset that is being used to purchase that new home....

TW

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I was buying. And to quote you:

If you were buying and did not previously own and if down payment money was not coming from the proceeds of a sale of property, I would not understand the point....

This was exactly my situation. Buying and didn't previously own. No down payment coming form the proceeds of a sale of property. They still checked public records for any outstanding judgements against me unrelated to the property I was purchasing.

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I was buying. And to quote you:

If you were buying and did not previously own and if down payment money was not coming from the proceeds of a sale of property, I would not understand the point....

This was exactly my situation. Buying and didn't previously own. No down payment coming form the proceeds of a sale of property. They still checked public records for any outstanding judgements against me unrelated to the property I was purchasing.

Wow...That is very interesting to know...."logically" if a Lender has approved someone for a loan and say this someone does have an outstanding judgement that does not report on ones credit but is found out through court records by a title company and they list this Judgement on the Title report (which I have never seen happen) then yes i can see that it is feasible that the Lender would deny a previously approved loan because the Title report shows an outstanding judgement that is not attached to anything as lien...Rationale from a lender would be that as soon as the borrower took owner ship of home that the judgement can come back and be attached to the newly purchased property...Hence if the borrower ever defaulted on the loan and went into Foreclosure the Lender would now have to contend with the Lien attached to the property before it was able to sell off the property to off-set any loss due to the foreclosure...So yes in this Unlikely event I can see a lender not wanting to take that risk....

But Again, I have never seen a title and escrow company do a court record search on the individual buyer of the property...EVER...From my experience they have only researched the property itself to determine that it has a clear title....

It is true that Escrow and title companies ask for SS#'s when escrow is opened up but from my understanding this is for conclusive and positive identification purposes that when recorded after a sale that you are indeed the owner. This is to prevent someone with the same name as you claiming they own the property...I have never witnessed the collection of a SS# by a Title and Escrow company to be used as a method to do a court search on the individual....It just does not seem congruent with the purpose of an escrow and title company...

Escrow and Title companies are the neutral third party that deal with Escrow and Title issues on Property, be it personal, Real or corporately owned...They are not in the business of researching individuals.....

Hey are there any Title and or Escrow Officers on this Board that can chime in?

Thanks

TW

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I'm in a similar situation as the OP. I'm scheduled to close on new construction on Tuesday(12/21/05), however I have a judgement that is not on my credit report but still active in another county.

I've asked this same question in a roundabout way to my LO, agent, and loan processor and all have said that attorney only checks the builder to see if there are any liens or claims against the title of the property. I'm hoping what truewealth and others have indicated is true. I will let you all know what happens on Tuesday.

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Not sure about the escrow acount because I don't have one.

Maybe this particular lender didn't want to run the risk of having another lein attached right off the bat? I have no clue.

Uhhh...So then do you pay your taxes and insurance on the property seperate from your mortgage payment?...When You signed final closing docs for your loan where did you sign?....When You put in a purchase contract on the home did the seller or sellers agent collect a "good Faith Earnest Deposit" ? If so where was that Earnest money held?...Escrow companies are the third party neutral bystander that helps facilitate purchases and refinances...

TW

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borg100,

I have great news for you...I was able to my new home (12/21/05) with a judgement on file in the court but not on my credit report. It seems like the title company really only cares about the builder and not necessarily you. I can only speak for my situation I live in GA. My advice to you is to keep a low-profile maybe call the title company anonymously and see what are their methods for searching.

P.S.: If you move yourself have some Bengay ready for all the aches and pains the next morning.

8-)

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