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Home Loan With Tax Lien And Judgment Mortgage Guidelines

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Home Loan With Tax Lien And Judgment Mortgage Guidelines

This BLOG On Home Loan With Tax Lien And Judgment Mortgage Guidelines Was UPDATED On February 9th, 2019

Mortgage Lenders will not only look at credit scores. Mortgage Underwriters will also carefully examine credit and credit payment history. Home Loan With Tax Lien And Judgment Mortgage Guidelines allows borrowers to qualify with tax liens and outstanding judgments:

  • Two of the things mortgage underwriters will look for are judgments and tax liens
  • Borrowers can qualify for home loan with tax lien and judgment
  • They need to have written payment agreements and have been making timely payments for the past three months
  • Lenders will want to see a written payment agreement with the Internal Revenue Service on tax liens and judgment creditors on judgment
  • The re-payment terms and conditions need to be provided to mortgage underwriters
  • At least a three month payment to the Internal Revenue Service and/or judgment creditors needs to have been in effect 
  • Mortgage underwriters will want to see at least a three months canceled checks or bank statements to be provided
  • There are lenders that will not qualify for a home loan with tax lien unless the borrower has had at least a 12 month re-payment history with the Internal Revenue Service as part of their overlays
  • Other lenders may not accept written payment agreements and want borrowers to pay outstanding tax liens and/or judgments in order to qualify

Qualifying For Home Loan With Judgment

Judgments are the worst derogatory credit item consumers can have.

  • Lenders think of judgments worse than bankruptcies and foreclosures
  • A judgment is a court ruling favoring the judgment creditor and giving the judgment creditor the right to enforce the judgment
  • Judgment creditors can go after the judgment debtor to collect on their judgment by legal channels
  • If a judgment creditor finds out that the judgment debtor has income, the judgment creditor can go after the judgment debtor and try to garnish their wages
  • The court that issued the judgment has no enforcement powers
  • It is not the responsibility of the courts to collect on the monetary judgment for the judgment creditor
  • The judgment creditor needs to proceed through other legal channels in trying to enforce and collect on the monetary judgment

Settlement On Judgment On Home Loan With Tax Lien And Judgment

If consumers do not have a written payment agreement set up with a judgment creditor and need to qualify for a home loan, they either need to have the judgment paid off in full and/or have it settled with the judgment creditor and have that judgment reported as satisfied.

  • Borrowers do not have to pay the whole face value of the monetary judgment
  • They can settle for a fraction of the monetary judgment face value amount
  • But need a release of the judgment and the judgment needs to show that it has been satisfied

How Long Does Judgment Remain On Credit Report

A Judgment will remain on your credit report for a period of 7 years.

  • However, even if the judgment is deleted off credit report, the judgment will be effective for at least 10 years in most states
  • The judgment creditor has the option to renew the judgment for another 10 years
  • Most judgment creditors will not renew a dormant judgment for another 10 years
  • Judgment creditors do not renew the judgment after statute of limitations once they know that the judgment is non-collectible due to the fact that it costs money in legal fees and recording costs in renewing the judgment
  • Judgment creditors will renew the judgment if they get wind that the debtor has money, assets, good income and it may be collectible

How Long Will Tax Lien Remain On My Credit Report?

A tax lien will remain on your credit report until the tax lien is satisfied and paid off in full.

  • From the date it has been satisfied and paid in full, it will remain on your credit report for a period of 7 years
  • Judgments will remain on your credit report for a period of 7 years from the date the judgment was recorded on public records

Can I Qualify For Mortgage If I Get Judgment And Tax Lien Deleted Off My Credit Report?

Credit repair does work and many consumers have great success in having collections, charge offs, bankruptcies, foreclosures,  tax liens, and judgments deleted off their credit report.

  • However, mortgage lenders will do a third party search with outstanding judgments, tax liens, bankruptcy, foreclosure, and other public records
  • Even if borrowers get public records expunged from credit report, the chances are that judgments, tax liens, foreclosures, and bankruptcies will be revealed when lenders conduct a third party public records search via Lexis Nexis or other third party searching service

How To Qualify For Mortgage With Tax Lien

Borrowers who need to qualify for mortgage with tax lien with a direct lender with no overlays can contact us at The Gustan Cho Team at Loan Cabin at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com. Gustan Cho Associates are experts in helping borrowers with outstanding tax liens and judgments.

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