FHA Guidelines On Judgment And Other Outstanding Public Records

This Article Is About FHA Guidelines On Judgment And Other Outstanding Public Records

A judgment is one of the worst derogatory items one can have on their credit report. FHA Guidelines On Judgment permit borrowers to qualify for FHA Loans with outstanding judgments. However, under FHA Guidelines On Judgment, borrowers need a written payment agreement and three months payments to the judgment creditor. Judgments are issued by a judge in the creditor’s favor for an set amount against the judgment debtor.

  • Mortgage loan borrowers can qualify for home loan with judgment
  • The creditor is known as the judgment creditor
  • A judgment is probably the worst thing you can have on credit
  • Collections accounts with outstanding balances can all lead to judgment accounts if creditor pursues to sue
  • It is up to the creditor to see how far they want to take the collection and charge off account
  • The only way to get can get rid of a judgment without paying is settling the judgment, making a written payment agreement or by filing bankruptcy
  • The good news is that a mortgage loan borrower can qualify for FHA home loan with judgment as long as they set up a written payment agreement with the judgment creditor
  • The judgment debtor needs to pay the judgment creditor for at least three months
  • Payment to the judgment creditor for three months cannot be paid in advanced
  • If the borrower settles with the judgment creditor, the borrower needs to get the release of the judgment from the courts

Vacating A JudgmentFHA Guidelines On Judgment And Other Outstanding Public Records

There are ways of vacating a judgment by filing an appeal. But this needs to be done quickly after the judgment has been issued. Excuses to have judgments vacated that is often used is claiming you did not receive proper service of the summons. Borrowers can qualify for FHA Loans with outstanding judgments under the following terms:

  • Consumers can negotiate with the  judgment creditor
  • Negotiate with the judgment creditor and see if they are willing to settle for a smaller amount of the judgment
  • If the judgment creditor is willing to settle to clear the judgment, make sure you get everything in writing
  • Make sure you get the release from the court stating the creditor certifies the monetary judgment has been settled and no other monies are due to the creditor
  • Save all the paperwork and canceled checks in the event the settled judgment comes and haunts you years later
  • You never know what can happen in the future
  • Appealing the judgment to have the judgment vacated is rather difficult and time consuming and can only be done in the earlier months after you get a judgment and not years later
  • Bankruptcy will vacate all judgments with the exception if the judgment is from a government agency and/or the judgment was the result of fraud

Borrowers who are looking for a home loan with judgment needs to realize that trying to vacate a judgment can take some time.

How Long Does Judgment Stay On Credit Report?

A judgment will stay on credit report for a period of 7 years from the judgment issue date.

Most judgments are good for a period for ten years to twenty years:

  • Depends on the state and statute of limitations on the state the judgment was issued
  • However, the judgment creditor can renew it for another ten years or twenty years
  • Consumers are considered judgment proof if they have very limited income and no assets
  • Judgment proof means that the judgment creditor is not able to collect any money or assets because the defendant has no net worth

For those who are applying for a home loan with a judgment can do so and pay the judgment off prior to closing or at closing.

FHA Guidelines On Judgment And Can I Get Mortgage If I Have JudgmentHow Long Does Judgment Stay On Credit Report?

Most lenders will not lend to borrowers with outstanding judgments. However, FHA Guidelines On Judgment allows borrowers to qualify for FHA Loans with judgments.

  • My advice is to consult with a mortgage lender who specializes in bad credit mortgage loans
  • Gustan Cho Associates can approve mortgage loans for borrowers with a prior unsatisfied judgment
  • This holds true as long as they have a written payment plan and have been paying on the judgment for three continuous months
  • Canceled checks, bank statements, and the judgment repayment plan agreement need to be provided

When Do I Have To Pay Off Judgment Prior To Mortgage Closing

If mortgage lender requires to pay off the judgment as part of the conditional mortgage approval, borrowers can pay off the judgment prior to closing or in some cases, at closing.  Proof of funds will be required and a judgment release will be required as well along with canceled checks. Title company can record judgment at closing.

FHA Guidelines On Judgment And Other Public RecordsWhen Do I Have To Pay Off Judgment Prior To Mortgage Closing

Credit Repair companies can remove judgments, tax liens, and other public records off credit reports. However, removing collection accounts, late payments, repossessions, and charge off accounts is fine. Nobody can find out about it since they are not public records. However, removing judgments and other public records such as foreclosures, deed in lieu of foreclosures, shorts sales, tax liens will become a problem. All lenders do a national public records search and even though public records are not posted on credit reports, they will find out about it through the public records data base.

To qualify for mortgage loans with outstanding judgments with a lender with no lender overlays, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected] The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.

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