Judgment to Expire 12/2007 - Need Mortgage 12/2007

[2008AMRC]

I'm in a similar situation as a previous poster except my judgment is set to expire 12/2007. I didn't want to hijack that thread so I posted a new one.

Experian and Equifax didn't show it on their report but TransUnion did. I contacted TransUnion and got it removed. I have the letter and the updated report. Unfortunately, the mortgage company still won't give me the mortgage. They said the judgment was still being reported by CredCo and that I needed to contact the court clerk and have it removed.

I contacted the court clerk and they said I needed to contact the creditor. I didn't because if I do that will reopen the case and then I may have another 7 year waiting period.

Yesterday I contacted CredCo to see why they were reporting the judgment. CredCo said that they only report information given to them by the big three and if the judgment was no longer being reported by TU then it was no longer being reported by them. I asked them if the judgment still showed on her report, she put me on hold and said that it wasn't. I asked for a copy of my report with them just to be sure and will have it by 11/30.

I'm not sure what the deal is with the mortgage company. They insist that as of today CredCo was still reporting the judgment. As of today, CredCo insists that they haven't been contacted by the mortgage company for a report since August. The mortgage company is also insisting that CredCo manages it's information independently and is getting the judgment directly from the court clerk.

The mortgage company will not allow the paperwork to leave Underwriting until this is taken care of.

Can anyone provide some advice? Thank you so much!

[flacorps]

There are three considerations here that you are confusing. They need to be teased apart for you to get an idea what you must do.

First, and least important is the reporting period for the judgment on your credit reports. Legally it's 7 years or the life of the judgment, whichever is longer. As a practical matter they drop off after 7 years in most instances.

Second is the judgment's life on the court's records. Judgments may or may not be renewable in your state. They may have a lifespan as little as five years, or as long as

twenty years. Liens may be available only during certain early years, with only active remedies (such as garnishment or asset seizure and sale) available later. Renewal may need to be done before expiration, or it may be available after expiration.

Third is the judgment's effect on the underwriting process. Even if it is legally dead, done and gone and not subject to being revived under the first and second paragraphs here, the underwriter's standards may not permit the loan to go through unless it is paid off. There may be another loan program that will take you with the blemish, but you ain't getting a loan under this one. Or, it's possible you might be able to meet the standards if it really is dead under the second paragraph.

YMMV

The key thing to realize is that the judgment may affect not just title to the property (if it constitutes a lien, it will attach to your real property and become superior to the mortgage in the moments between the recording of your deed and the recording of your mortgage--a mortgagor can't allow that to happen) but your ability to repay: you could find yourself garnished or have your savings seized, which would affect your ability to pay back the loan ... the mortgage must be underwritten as though one or both of those eventualities is actually happening now since they may happen in the future.

[2008AMRC]

It was in Indiana and I think the Statute of Limitations is 6 years. Is the Statute of Limitations and Life of Judgment the same thing?

I don't know if judgments are renewable in IN so I will try to find out. They have not contacted me after I contacted them in 2002 and have not tried to garnish my wages.

Regarding the underwriting process - I think you are correct. I ain't gettin this loan with these guys.

[2008AMRC]

It was in Indiana and I think the Statute of Limitations is 6 years. Is the Statute of Limitations and Life of Judgment the same thing?

That's incorrect. I just found the SOL page on this site and it's actually 20 years. YIKES!

[flacorps]

If the judgment is in another state, it can only be enforced in your current state if it is either domesticated in a court action or recorded locally under the Uniform Enforcement of Foreign Judgments Act. At this point, neither is terribly likely if it hasn't happened already, and there might even have been an Illinois statute of limitations on the enforcement of foreign judgments that has already run out too.

That leaves reporting as the main hurdle. So the question you need to have answered is whether underwriting standards will let them ignore an out-of-state judgment they know about after it has aged off your CRA reports.

If so, the loan can probably go through. If not, another lender might do the loan under terms similar to the loan you missed out on, provided their application doesn't require you to disclose a judgment that old and they don't pull an RMCR (Residential Mortgage Credit Report, a/k/a a "Full Factual" report), which isn't bound by the 7-year dropoff horizon.

A mortgage broker would be helpful here, particularly one who specialized in B/C situations.

Keep in mind that part of YMMV is that the foreign judgment might be negotiated down to a very reasonable amount if it's about to drop off your credit and the judgment creditor doesn't know it's holding up your mortgage process. If you can get clear guidance as to what will clear the underwriter's block and you think you can swing it, get in touch, pay the money and get the satisfaction on record in Indiana and present your underwriter with a certified copy of the recorded document.

[2008AMRC]

Just got an email from the mortgage lender and he is asking for "1) Proof judgment of $4594 has been satisfied."

Does satisfied = paid?

Or perhaps, satisfied = was good for me too, hand me a cigarette please?

What kind of proof does he need?

TIA for all your help today.

This is a very, very awesome site!

[flacorps]

Satisfied means the judgment creditor is willing to take it off the official records book ... theoretically they could do it with no payment out of the goodness of their hearts.

But in the real world, it's gonna mean they got paid something that made them willing to do that ... not necessarily the whole amount, but that's a matter for negotiation.

[MadMonkey]

Let's take a step backwards.

Step #1: Pull your credit reports yourself and find out exactly whats being reported.

If all three show that the judgement has fallen off, tell the loan broaker your using to F' themselves and find you another loan.

If they are not willing to work with you then start shopping again. You have about 14 days to make as many pulls as possible on a mortgage before it starts effecting your FICO's.

If you can hold off buying till next summer, do it. Were only in the calm of the mortgage storm that's about to sweep across the country.

All give you a little heads up. Companies like Country Wide are screaming to the press that there loosing money. Last month 40 billion. Everyones say bohoo for them. Don't believe the sad story one bit. Every mortgage that they have written that was an ARM, (Adjustable Rate Mortgage) had a default insurance policy on it, (PMI) paid by the borrower, and these PMI's pay up to 40% of the mortgage amount, on losses that CW may incure to get rid of the property.

I dabble in realestate and am licensed, so I have access to the info the general consumer is does not get.

Type in google: Country Wide REO. Dig around and you will find a hidden link on there web sight that takes you to all the properties they have repoed and have up for sale.

Out here on the west coast I have been looking at these properties, looking for a good deal, guess what there not there. CW is actually relisting these properties for sale for more then they actualy repoed them for. Hint, I get to see the real info as realestate agent.

It's only a matter of time when this practice comes back and bites them. See the feds look at it differently. The more property they sit on that is not moving, the more risky the fed funds to that company become, and that means higher loan rates to CW.

Mr prediction, as is with a lot of economists out there, companies like CW are going to be gone by the end of next year if they continue this practice. Regardless if they get there act together, at some point summer to winter of next years repoed properties are going to start dropping in price even faster then they are today. So if you can wait do it.

[flacorps]

Type in google: Country Wide REO. Dig around and you will find a hidden link on there web sight that takes you to all the properties they have repoed and have up for sale.

Out here on the west coast I have been looking at these properties, looking for a good deal, guess what there not there. CW is actually relisting these properties for sale for more then they actualy repoed them for. Hint, I get to see the real info as realestate agent.

It's only a matter of time when this practice comes back and bites them. See the feds look at it differently. The more property they sit on that is not moving, the more risky the fed funds to that company become, and that means higher loan rates to CW.

CW and others are in a very difficult position vis-a-vis REO. If they price it too high, it sits on their books and affects the ratios that allow them access to more funds (and keeps the FDIC off their necks if they're banks that serve the public).

OTOH, if they price properties too low, it depresses values in the neighborhoods where those properties are located, and lowers the value of collateral on loans they have outstanding (which could trigger repurchase agreements on CMOs), lowers what they're going to be able to get on future sales of REOs in the same areas, and potentially triggers further defaults because homeowners who would otherwise have been able to take second mortgages, refinance their homes, or sell them to get out from under ... won't have those options.

The PMI carrier may have a lot to say about the pricing ... the lender perhaps not so much.

[2008AMRC]

Let's take a step backwards.

If all three show that the judgement has fallen off, tell the loan broaker your using to F' themselves and find you another loan.

It's fallen off of all three and hopefully tomorrow or Saturday I get the CR from Credco that shows clear from them as well.

I'm not able to understand why they want a letter from the County Clerk that the judgment is cleared when it's no longer being reported by the CRA's. Is there a super secret CR that I should be worried about? Flacorps brought up a RMCR report in an earlier report. I had never heard of this before. Is it possible to order a copy of that and check for errors?

I am so in love with this site now. I wish I had discovered it long before we started the mortgage process.

[flacorps]

I'm not able to understand why they want a letter from the County Clerk that the judgment is cleared when it's no longer being reported by the CRA's.

To make it crystal clear: once they know about a judgment they can't let it go. Even if you weren't required to disclose it and they wouldn't have learned about it if the reporting agency had dropped it when they should have done so. The cat is out of the bag.

A new lender with a new underwriter may not have to be informed, and may not find out.

Underwriting is a process where someone vets your representations and whatever other facts they can gather, and certifies to the lender that you're an OK Joe and will pay back your loan. If you don't .... well, the underwriter's errors and omissions policy would have to cough up to the lender if something was amiss that they should have known and reported (let alone something they knew about).

The judgment showing up on the CRAs has no bearing on whether someone could enforce it against you. As long as it's still valid in its home state, someone could record it in your county and start doing nasty things like garnishing, seizing assets, etc. In fact, they might get away with it even if it's not valid in its home state. Once they start trying to do things like that it's your job to stop them if it isn't right--courts aren't likely to notice the glitches as they rubber stamp the papers... Even if you get 'em stopped, you may not be able to hit 'em with fraud (although occasionally some collector does get nailed ... one called CAMCO got shut down a few Christmases ago).

P.S. - The RMCR could be used in almost every mortgage these days (it's for those over $150k, which used to be the exception but is now the rule), however it isn't. And when it is used, it's typically used to try to help untangle questions in some ugly "standard" report that doesn't reach back far enough to enable a full analysis of the baddies. It's expensive, and not really worth getting your hands on. Better to spend $8 on your own Lexis/Nexis report if you want a nice long, detailed item to read.

[LVMortgageMom]

https://secure.mortgagewebsuccess.com/application/System/SharedFiles/1003.pdf

Above is a link to a 1003 or application for a mortgage. If you go to page 4, i believe under the declarations section, one of the 1st questions is are there any outstanding judgements against you. Or something like that. If you scroll down a little further to the paragraph right above your signature line, you will notice that you are certifying that ALL of the information that you are providing is true and accurate to your knowledge.

Have I seen these filled out erroroneously without consequence, yep sure have. Have I also seen borrowers prosecuted for mortgage fraud for providing fraudulent info on the 1003, yep sure have. If your loan closes and it is found out that you answered "no" you don't have any judgements knowing all the while you did, your lender could simply call your note due and payable. Which means you would have to come up with the cash or refi pretty quickly. Or they could move to prosecute you (at that point mortgage fraud is a federal offense) and simply take the house.

What are the chances that any of this COULD happen to you, I don't know. I'm not in a position to answer that. However, with the temperment of the market, there is a A LOT more scrutiny by underwriters, investors, as well as title insurance reps. After all, its the title insurance companies that are insuring the lenders that the home will have a clean title.

Even if you find a lender to give you the loan, because the judgement is no longer listed on your CR, a prudent title rep, may find it based on your previous addresses, which will hault your loan yet again.

Understand, I am not on a high horse, passing judgement, or offering suggestions for that matter. Just wanted to give you a little more perspective on how big of a deal this is.

[flacorps]

How material to the underwriting process is a judgment that has aged off the CRA reports and that isn't recorded in the state where the residence is being purchased?

I'm not saying it is or is not a material misrepresentation or omission. I'm simply making the observation that the question should be asked and answered prior to deciding how to answer that question on the 1003.

It's possible there would be a lawyer specializing in white collar crime in the OP's neck of the woods who would be willing to write a comfort letter opinion--for a lot less than it might cost to pay that judgment.

[LVMortgageMom]

As previously stated, there really is no cut and dry answer to this question, because there are many different angles involved. Just because it has aged off the CR is irrelevant to its existence and the OP's knowledge of it. It can only be reported for either 7 or 10 years, but is enforceable for 20 according to the OP. That's where the prelim comes in. It is the responsibility of someone in that mortgage office to ensure that the preliminary title report is clean.

Without knowing much about the existing judgement, I assume the OP has a previous address in the same county, or at least state as where the judgement was recorded. So a PR search by the title agent could reveal the existence of said judgement. A condition of either docs or funding is that the prelim is clean. If it goes unnoticed and the loan funds, there is still the possiblity that it is picked up by the QC auditor. At this point, the 1st place you go is to see if the borrower indicated they had a judgement.

This is VERY material to the U/W process because judgements can and often are domesticated. With the assistance of CR and CRAs, it's not very difficult for creditors to determine that you are shopping for a mortgage and in what county your new home is located.

My first thought to this thread was the the LO simply needed to pull a new report, as it sounded as if they were simply re-issuing the old one. However, I wanted the OP and all others reading this to understand that it goes deeper than the CR. Even with switching lenders and closing on your home, you could be treading into murky waters.

[flacorps]

Even with switching lenders and closing on your home, you could be treading into murky waters.

I know secondhand of one instance where a lender got wind of something spurious on a credit report after the mortgage was already in place and presumably seasoned (had been around for a year or more, for those who need that term defined) and called the note due and payable immediately on pain of foreclosure.

The item that showed up on the report (a year or so ago) was a medical collection from the early '90s that had been paid in the early '90s. Nonetheless, the lender wanted the problem off the CRA reports in an unreasonably short period of time, and the individual had to get a lawyer involved because of it. I believe it was cleared up to the borrower's satisfaction.

Keep in mind that this was not an active judgment out there or anything, it showed up as an unpaid collection when it was really an old paid collection, but it showed up with a more recent time frame (presumably before the loan was underwritten, not after) ... so old that the collection wasn't on the borrower's credit report when the borrower got the loan.

Because of the sensitivity of the situation, I agreed that I Can't identify Who the lender was, but suffice it to say they were and are a biggie in the subprime arena who has recently had well documented troubles... (but this was before their troubles were known ... perhaps they were trying to force "weaker" borrowers to have to re-fi because they saw their troubles coming).

I think it's important to realize that a lender wouldn't need to be a nutso crazo lender like the one I mentioned in order to have a massive, gigantic problem with a pre-existing judgment showing up, but also keep in mind that a freshly domesticated judgment may well look to the lender a lot like a brand new one that would not really be grounds for the lender to do anything ... only a close analysis of what got filed in the borrower's locale would reveal the true state of affairs, and the lender typically doesn't get that, merely receiving a cryptic line like:

12/7/07 Jud Ford Motor Credit Super CT Ramsey County B1033P3044 $12,343

As always, YMMV

But if there's a judgment out there, even in another state ... and you know it's not expired (and not subject to revival if it is expired) ... Answer "yes" on form 1003 unless you've got an opinion from a white collar crime attorney that it's not material and you can answer "no".

If it's not in your state (yet), it can't and won't create a lien superior to your lender's. That's the key concern, and anything that would affect title is without a doubt material. As for things that don't affect title ... they may or may not be material--that's where you'll need the legal opinion, especially if they're quite old.

[akins503]

I'm in a similar situation as a previous poster except my judgment is set to expire 12/2007. I didn't want to hijack that thread so I posted a new one.

Experian and Equifax didn't show it on their report but TransUnion did. I contacted TransUnion and got it removed. I have the letter and the updated report. Unfortunately, the mortgage company still won't give me the mortgage. They said the judgment was still being reported by CredCo and that I needed to contact the court clerk and have it removed.

I contacted the court clerk and they said I needed to contact the creditor. I didn't because if I do that will reopen the case and then I may have another 7 year waiting period.

Yesterday I contacted CredCo to see why they were reporting the judgment. CredCo said that they only report information given to them by the big three and if the judgment was no longer being reported by TU then it was no longer being reported by them. I asked them if the judgment still showed on her report, she put me on hold and said that it wasn't. I asked for a copy of my report with them just to be sure and will have it by 11/30.

I'm not sure what the deal is with the mortgage company. They insist that as of today CredCo was still reporting the judgment. As of today, CredCo insists that they haven't been contacted by the mortgage company for a report since August. The mortgage company is also insisting that CredCo manages it's information independently and is getting the judgment directly from the court clerk.

The mortgage company will not allow the paperwork to leave Underwriting until this is taken care of.

Can anyone provide some advice? Thank you so much!

I had a similar experience about six years ago. I had several judgments against me in PA. I was still able to still secure a loan. The title was clear on the property I purchased. Also in PA a judgment lean cant follow to new properties aquired after the judgment is filed. Check your state laws concerning judgments. I know in my state they are can only be enforced for five yrs if thay are not renewed w/in that period. However, they can be extended for 20 yrs if they regurally renew them.

[flacorps]

Also in PA a judgment lean cant follow to new properties aquired after the judgment is filed.

Is that for homestead only? If not, it would seem a nutty rule, unless there was a provision to allow a judgmentholder to lien those properties after the acquisition (perhaps the rule was put in at the behest of mortgage lenders).

On another note, and on another board, I once instigated a discussion of whether credit repair (to remove valid baddies which would then not be disclosed in the application process and which would presumably greatly raise FICO by their absence) might constitute mortgage fraud. My position was that it could. The consensus of the mortgage professionals on there was that it could not. I was shocked.

[akins503]

Is that for homestead only? If not, it would seem a nutty rule, unless there was a provision to allow a judgmentholder to lien those properties after the acquisition (perhaps the rule was put in at the behest of mortgage lenders).

On another note, and on another board, I once instigated a discussion of whether credit repair (to remove valid baddies which would then not be disclosed in the application process and which would presumably greatly raise FICO by their absence) might constitute mortgage fraud. My position was that it could. The consensus of the mortgage professionals on there was that it could not. I was shocked.

The property I bought was a commercial building. I was able to obtain title insurance even though I had judgments against me.

[flacorps]

The property I bought was a commercial building. I was able to obtain title insurance even though I had judgments against me.

In Florida to accomplish such a thing you would either need to form a corporate entity or a Florida Land Trust. Individual ownership on a commercial property would result in the judgemnt lien attaching in the moments after the deed was recorded and before the mortgage was recorded, putting the mortgage unacceptably in 2nd priority.

For homestead, the issue would technically not apply, but title companies would still be wary of letting the deal close ... I don't hear of it happening much.

[akins503]

In Florida to accomplish such a thing you would either need to form a corporate entity or a Florida Land Trust. Individual ownership on a commercial property would result in the judgemnt lien attaching in the moments after the deed was recorded and before the mortgage was recorded, putting the mortgage unacceptably in 2nd priority.

For homestead, the issue would technically not apply, but title companies would still be wary of letting the deal close ... I don't hear of it happening much.

Actually I remember only one of the judgments was reported on TransUnion I think. No other judgments were reported. I remember the LO asking me about the judgment and indicating I may have to pay it. He only brought it up once and I sure as heck never brought it up again. The loan closed w/out paying the judgment.

[2008AMRC]

I got the CredCo report and it does list the judgment. I also got another report from TransUnion and it is clean.

The CredCo report also has my FICO scores: EFX Beacon 5.0 = 608, XPN FICOII = 612, TUC FICO Classic 04 = 658.

So are there different kinds of FICO scores?

But back to the CredCo report. They are "a reseller of credit scores provided by the three national repositories... reflecting the original credit information obtained by [them] prior to any verifications that might have been made by CredCo."

This concerns me because there is information here that has aged off of my CR but appears on this one. For example cards that I had back in college are still reporting even though they have been paid, closed and removed from all of my other reports for probably close to 10 years.

It also shows me as having several duplicates of cards that I do not have.

Why is this? Do the the CRA's have one set of data they show us and another set of data they give mortgage lenders? Should I contact CredCo and report the aged off data and the inaccurate data or should I go back to the CRA's and ask why they are still reporting it?

AND... my wallet was stolen in 1998 and accounts opened using my data. The CRA's are still reporting my last name is Wither and Witherlong. I've sent in my DL, passport, BC but have never been able to get them to report my name correctly. What can I do about that?

[flacorps]

So are there different kinds of FICO scores?

Dozens. For different purposes ... auto-enhanced for selling cars, as well as others that are intended to do very specialized things like tell how likely you are to file bankruptcy.

But back to the CredCo report. They are "a reseller of credit scores provided by the three national repositories... reflecting the original credit information obtained by [them] prior to any verifications that might have been made by CredCo."

This concerns me because there is information here that has aged off of my CR but appears on this one. For example cards that I had back in college are still reporting even though they have been paid, closed and removed from all of my other reports for probably close to 10 years.

It also shows me as having several duplicates of cards that I do not have.

Why is this? Do the the CRA's have one set of data they show us and another set of data they give mortgage lenders? Should I contact CredCo and report the aged off data and the inaccurate data or should I go back to the CRA's and ask why they are still reporting it?

AND... my wallet was stolen in 1998 and accounts opened using my data. The CRA's are still reporting my last name is Wither and Witherlong. I've sent in my DL, passport, BC but have never been able to get them to report my name correctly. What can I do about that?

The CredCo report that you have is likely to be a "full factual" or RMCR report, or else it wouldn't show anything older than 7 years.

Sad to say the FCRA doesn't give you a lot of rights with respect to what is being reported on those sorts of reports. It's focused on consumer credit and on the last seven years.

If there's a plum job, life insurance or house on the line ... the old (absence of) rules applies. Heck, they can probably do like the old reports once did and count the liquor bottles in your trash cans...

[2008AMRC]

That stinks for me - I'll do what I can and keeping plugging away at it. Thanks for all your help! I really appreciate it.

[firstsource]

I think you would have to have a mortgage broker order one for you. They are fairly expensive (I think in the 50.00 range-I only ordered one by mistake a long time ago) but they do have things that are not on the standard reports.

Charles

[flacorps]

On another board I'm told that new mortgage standards allow loans to go through if the judgment doesn't affect title. I imagine it might kick you into subprime programs though.

But judgments must be disclosed regardless (although the fraud case that the poster who told me about the requirement referred to indicated a situation where the person who denied having a judgment was asked about active judgments from the previous ten years--I guess it depends on how the question is worded).