Can You Get A Mortgage Loan Approval With An Unsatisfied Judgment?

This BLOG On Can You Get A Mortgage Loan Approval With An Unsatisfied Judgment Was UPDATED On October 31st, 2017

Can You Get A Mortgage Loan Approval With An Unsatisfied Judgment?

Mortgage Loan Borrowers can qualify for mortgages with bad credit. Not only Can You Get A Mortgage Loan Approval With An Unsatisfied Judgment, but borrowers can qualify for home loans with the following:

  • Outstanding Collections without having to pay them off
  • Outstanding Charge Offs without having to pay them off
  • Judgments and Tax Liens as long as borrowers can get written payment agreements by judgment creditors and/or the Internal Revenue Service and three months payment seasoning
  • Late Payments in past 12 months
  • Late Payments after bankruptcy, foreclosure, deed in lieu of foreclosure, and short sale

Can You Get A Mortgage Loan Approval With An Unsatisfied Judgment: What Are Judgments

Judgments are one of the worst things you can have on a consumer’s credit report.

  • Most creditors are reluctant in granting credit to loan applicants who have unsatisfied judgments. 
  • A judgment creditor can enforce a civil judgment by garnishing wages or attaching liens to assets.
  • However, most judgment creditors do not enforce their judgment because it is time consuming and costly. 
  • In order for a judgment creditor to be successful in collecting anything from a judgment debtor, the judgment debtor needs to have assets. 
  • If the judgment debtor does not have any assets, the judgment debtor is judgment proof, which means that the judgment creditor cannot do anything to collect on the judgment. 
  • Most states have strict laws that protect judgment debtors.

How Can I Get Rid Of A Judgment?

Four ways to get rid of a civil unsatisfied judgment.

  • The first way is trying to get the judgment vacated. 
  • Those who were not served with the judgment the right way can appeal the judgment and see if they can get it vacated. 
  • We will cover on how to get a civil judgment vacated in future blogs. 
  • Another way of getting rid of an unsatisfied judgment is by negotiating with the judgment creditor on accepting a certain percentage of the judgment and settling it where the debtor have no more liability. 
  • Make sure to get a final payoff letter and a release to record the judgment as being totally satisfied on public records.
  • The third way of getting rid of unsatisfied judgment is by filing for Chapter 7 bankruptcy. 
  • Chapter 7 Bankruptcies wipe out unsatisfied judgments.
  • Consumers will no longer have the outstanding liability if they include the unsatisfied judgment on Chapter 7 bankruptcy. 
  • The fourth and final way of getting relieved from paying unsatisfied judgment is by waiting out the statute of limitations. 

How Long Are Judgments Effective For

Judgments are the worst derogatory credit item any consumer can have.

  • The judgment will remain on credit report for a period of seven years.
  • However, most judgments are good for ten years from the date the judgment was entered. 
  • It depends on which state the judgment was entered. 
  • Most states also gives the judgment creditor an option to renew the judgment for another ten years. 
  • For example, if a consumer had a civil judgment entered in Florida ten years ago, the judgment creditor has an additional ten years after the original ten years where the statute of limitations has expired. 
  • Many judgment creditors do not renew their judgments after the statute of limitations runs out.

Can I Get A Mortgage Loan If I Have Unsatisfied Judgments Without Filing Bankruptcy?

The answer to this question is YES!!!!

  • Mortgage borrowers can get a mortgage loan approval without filing for bankruptcy if they have unsatisfied judgments. 
  • Most mortgage lenders do not like the idea unsatisfied judgments.
  • However, if mortgage borrowers have a payment agreement with the judgment creditor and have proof making three continuous monthly payments to the judgment creditor, borrowers will qualify for a mortgage loan. 
  • Mortgage borrowers need to provide the settlement agreement plus provide three months worth of cancelled checks and/or bank statements.

Qualify Now With Direct Lender With No Lender Overlays

Mortgage Borrowers who are looking for a direct mortgage lender with no lender overlays, please contact The Gustan Cho Team at USA Mortgage. Please Contact Us  via calling or texting us at 262-716-8151 or email us at gcho@usa-mortgage.com. We are available 7 days a week, evenings, weekends, and holidays.

Gustan Cho NMLS ID # 873293

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