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Judgements & Home Loans


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I have two default judgements against me. One is being paid on currently, though I don't see how the credit report reflects that, but the law firm will attest that I'm paying on it monthly.

The second is just sitting there on my TU report. No attempt has been made to collect on it since it was entered in 2003. I have not contacted the lawfirm as of yet, so I'm not sure what the exact amount is (credit report lists $1500 and change)

Does this mean that I will not be able to get a home loan until/unless both judgements are paid in full?

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The mortgage company will, with 95% liklihood, require both judgments be satisfied before the mortgage is issued.

If you explain a satisfactory payment arangement, they may let the payment plan stand without full demand for payoff. However, that is still more the exception than the rule.

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Your judgments are already recorded in Public Records. If you purchased a home, the sale would be recorded there also. If you have to borrow money to purchase the home, the mortgage (which is the lien against the property, the security for the loan) would be recorded also. In the few seconds between recording of the sale and recording of the mortgage lien, your judgment would attach to the property...in first position. No lender in the world is gonna allow that. Their priority position is what allows them to foreclose on the property in case you default. That's why lenders don't give money to consumers with outstanding Public Records.

Take care of your judgments. Get proper dispositions and have them recorded at the same location/county as the judgment.

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I have two default judgements against me..... Does this mean that I will not be able to get a home loan until/unless both judgements are paid in full?

My 2 cents

If you are applying for a mortgage, all you need is the satisfaction letters to forward to your loan officer.

Which in turn - the loan officer will give to their processor, who will check your information with the title company.

Judgements are vacated at the court house, before it gets cleared on your credit report.

Banks use title companys to check borrowers information, for liens and judgements at the local court house.

Just have all your paperwork together and you'll be fine.......:)++

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Since you said banks use title companies to check at the local court house, could I just have that same kind of check done myself.

I have checked at the court house and online and it shows nothing there although there are things listed on my report.

I would just be curious if the title company knows or has different procedures for checking since they would be more familiar with it than I.

Thanks

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The proper dispositions for a judgment are Satisfaction of Judgment and Order to Vacate Judgment. Both are legal proceedings to close the action. The procedure varies a bit by state, but you can safely assume that a judge has to (sorta) bang his gavel.

In order to forward the satisfaction letter, you need to obtain it first. :)

"...do not continue to affect..."

If the judgment is vacated, the Public Record should be suppressed on your CR.

If you, or they, obtain a Satisfaction, the (now resolved) judgment will continue to appear on your CR and impact your credit and scores for 7 years, according to the FCRA 1681c, Subsection 605. There is a sticky at the top of the page for your reference. Public Records of any kind, even the resolved ones, have significant impact on scores. But having the disposition listed also shows it as something that won't impact future loans.

Whatever disposition you get, be sure to have it recorded in the Public Records section/department at the same location (county courthouse) that the original judgment was granted.

"...title company knows..."

Title companies specialize in searching records for legal actions that impact property ownership. Their searches are more thorough and specialized for that reason. You could always contact a local one for info, or a Real Estate attorney.

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Ok so I pay off the judgement and then....

Does the law firm I'm paying send something to the courthouse indicating the judgement's been satisfied? Do I have to file something?

In addition, what can I require of the law firm that holds a judgement? The second judgement is from <redacted>, and they have quite a reputation for heavier than allowed fees and improper application of payments (ie you pay and pay but the balance never goes down) so I was wondering if I could require a full documentation of fees and payment schedule prior to starting payment. The judgement was $1500 plus costs. Any idea what "costs" I might expect?

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You're getting more and more specific in your questions. I'm afraid we can't answer some of those.

"...send something...file something..."

Your own state's laws will tell you this. In some states, the plaintiff is required by law to file the Satisfaction upon PIF. In others it's not a requirement. My suggestion is do to it yourself, and make sure it's recorded, which involves a separate (usually small) fee. That way, you know when it's resolved. Be sure to keep a copy of the disposition in your important records and only send out copies or Certified copies.

Gotta Go, I'll have to finish this later...

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I have two default judgements against me. One is being paid on currently, though I don't see how the credit report reflects that, but the law firm will attest that I'm paying on it monthly.

The second is just sitting there on my TU report. No attempt has been made to collect on it since it was entered in 2003. I have not contacted the lawfirm as of yet, so I'm not sure what the exact amount is (credit report lists $1500 and change)

Does this mean that I will not be able to get a home loan until/unless both judgements are paid in full?

In Kansas, judgments have a 5 year life and can be renewed, if they are not renewed at 5 years, they no longer operate as a lien on assets. The creditor also must to have tried to collect on the debt in that 5 years in order to renew it.

If they are dormant for another 2 years and not renewed in that time, they are gone forever per statute.

So, I would suggest you find out if there are similar laws in your state and if the judgement is expired and they have done nothing to try and collect, it could be going away in a few years.

Once the judgement is totally void by time, then you could ask to have it removed from the report.

This is the part of the Kansas statute I am referring to

60-2403

Chapter 60.--PROCEDURE, CIVIL

Article 24.--EXECUTIONS AND ORDERS OF SALE

60-2403. Judgment, when dormant; release of record; child support judgments after July 1, 2007, never dormant. [see Revisor's Note] (a) (1) Except as provided in subsection (B) or (d), if a renewal affidavit is not filed or if execution, including any garnishment proceeding, support enforcement proceeding or proceeding in aid of execution, is not issued, within five years from the date of the entry of any judgment in any court of record in this state, including judgments in favor of the state or any municipality in the state, or within five years from the date of any order reviving the judgment or, if five years have intervened between the date of the last renewal affidavit filed or execution proceedings undertaken on the judgment and the time of filing another renewal affidavit or undertaking execution proceedings on it, the judgment, including court costs and fees therein shall become dormant, and shall cease to operate as a lien on the real estate of the judgment debtor. When a judgment becomes and remains dormant for a period of two years, it shall be the duty of the judge to release the judgment of record when requested to do so.

d) If a renewal affidavit is not filed or if execution is not issued, within 10 years from the date of the entry of any judgment of restitution in any court of record in this state, the judgment, including court costs and fees therein shall become dormant, and shall cease to operate as a lien on the real estate of the judgment debtor. Except as provided in subsection (B), when a judgment becomes and remains dormant for a period of two years, it shall be the duty of the judge to release the judgment of record when requested to do so.

This is only part of the statute just as an example.

Again, find out for yourself in your state.

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Your judgments are already recorded in Public Records. If you purchased a home, the sale would be recorded there also. If you have to borrow money to purchase the home, the mortgage (which is the lien against the property, the security for the loan) would be recorded also. In the few seconds between recording of the sale and recording of the mortgage lien, your judgment would attach to the property...in first position. No lender in the world is gonna allow that. Their priority position is what allows them to foreclose on the property in case you default. That's why lenders don't give money to consumers with outstanding Public Records.

Take care of your judgments. Get proper dispositions and have them recorded at the same location/county as the judgment.

Not always true. I got a mortgage about 8 yrs ago with a judgment against me. In my state (PA) a judgment can't attach to new property aquired. So no title issues arose. However, each state is different. Also, the whole mortgage industry was much different then.

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Well, I've developed a plan to get this all settled and taken care of.

The one judgment is already being paid on. When I get my "tax rebate", it should be close to completely paid off, or within $500 of it. Once I get it paid off and get it listed as satisfied and reporting correctly, I'll move on to step two.

Step two is contacting Wolpoff & Abramson, as much as I hate to, and asking for a detailed account of every penny I owe. The original judgment in 2003 was $1,500 and change plus "costs". I'm assuming, since I'm dealing with Wolpoff & Abramson, I'll be getting a bill for at least $3,000 if not more. I guess I run the risk of them deciding my contact means they should start garnishment procedures, but what else can I do?

Step three is getting a second job part time and using all income earned to pay W&A until the judgment is satisfied. If all works well, I should have both judgments satisfied and off my record by mid 2009.

Since I'm establishing good credit along the way, and also paying consistently on my student loan, I should be in pretty good shape credit wise by the time these judgments are gone. I'm hoping to be a homeowner by 2010.

It'll be a long two years, but worth it in the end I think.

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Sounds like a good plan.

One thing, you might try to negotiate with both creditors when you get down in amount owed, where you have enough cash to PIF, and see if they'll settle for less if you give them cash. Hopefully ALOT less!

Just make sure they give proof it was PIF not "legally settled for less than amount owed".

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