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Pre-qualification and judgments


nj_ny
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Hi there. I have two judgments that have fallen off my credit report, but I know that they'll come up at some point during the mortgage approval process, so I'm starting to work to clear them up now.

At what point in the approval process does the lender do the detailed search that would turn these up? Asking because I'd like to go through the pre-qualification process (assuming that the search that would turn up the judgments happens closer to making an offer on a property) as I work to get those judgments satisfied, but not if that would adversely affect my status with the lender. Thanks!

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Being a former loan officer - the prequal is based on three things - your credit, the loan to value ratio (LTV), and your debt to income DTI ratio. You complete an application (called a 1003 Loan Application). Next an appraisal is done to determine to value.

Your file is submitted to an underwriter to access and give conditions to be met before you have your closing. At the same time a title search is done, and an an intensive background check is down on the property and the borrower.

Ultimately it depends a the lender, how extensive, and what checks are done.. I have observed people with lower credit scores are checked out much more than people with higher credit scores.

If you are working with a credit union and something comes up. There is a good chance to loan application is dead. Working directly with a Mortgage bank, if something comes up, there may be different programs to switch to.

If you know you have issues in your background. In my opinion it is better to work with a Mortgage broker, that can quickly change different lenders if something comes up. Any issues should be discuss ahead of time, if found later can be a big waste of time, and cost you a lot of money.

Back when I originated loans, I could of written a book with cases, where something turned up that wasn't discussed before...:evil::evil::evil::evil:

Having a judgement fall off your credit report - are you looking at a trimerge credit report, from Experian, Equifax and TransUnion? Trimerge credit reports are very in depth, much more than a single merge.

Bottom line if you know you have a judgement - your best option is to call them saying you want to settle. The time to ask for a lower amount is before the debtor takes you to court. After a judge awards a judgement it is harder to settle for less, but it's worth a shot.

G.L.

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Edited by 2ndTimeAround
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Wow - this is all great information. Thanks so much for taking the time to write such a thorough response.

The judgments have fallen off all three reports, which I check monthly. We're in the 7 year range, so that makes sense.

Right now, I'm in the process of ensuring that a notice of satisfaction was entered for the one that was paid a few years ago, and figuring out how to approach the owed party on the other, which has never pursued getting their money. I can pay it in full - my main concerns are that they file the satisfaction paperwork quickly, and that this doesn't pop up on my credit report as satisfied (when there's currently no entry at all). Would love some tips on the best way to approach them if anyone has them.

Thanks again for the info!

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....my main concerns are that they file the satisfaction paperwork quickly, and that this doesn't pop up on my credit report as satisfied

Thanks again for the info!

Reading your response - you will get better result if you take control and do it yourself.

First get a copy of you credit report (freecreditreport.com), examine it for any problems. Then write the C/B's asking them to update your report. It takes about 30 days. If you paid and settled a judgement, include a copy of the discharge letter.

:)

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