This guide covers qualifying and getting mortgage approval with unsatisfied judgments. Can you get a mortgage approval with unsatisfied judgments? Borrowers can qualify for mortgages with bad credit. Not only can you get a mortgage approval with unsatisfied judgments, but borrowers can qualify for home loans with outstanding collections without having to pay them off and outstanding charge-offs without paying them off.
Judgments and tax liens need a written payment agreement and three months of monthly payments. This holds true as long as borrowers get written payment agreements by judgment creditors or the Internal Revenue Service and three months of payment seasoning.
HUD, the parent of FHA, has the most lenient agency mortgage guidelines than any other mortgage loan program. Late payments in the past 12 months. Late payments after bankruptcy, foreclosure, deed-in-lieu of foreclosure, and short sale. This article will discuss Mortgage Approval With Unsatisfied Judgments And Tax Liens.
How To Qualify For Mortgage Approval With Unsatisfied Judgments
Judgments are among the worst things consumers can have on a credit report. Most creditors are reluctant to grant 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. This is because it is time-consuming and costly. For a judgment creditor to successfully collect anything from a judgment debtor, the debtor must have assets. If the judgment debtor does not have any assets, the judgment debtor is judgment-proof. This means that the judgment creditor cannot do anything to collect on the judgment. Most states have strict laws that protect judgment debtors.
Mortgage Approval With Unsatisfied Judgments: How Can I Get Rid of a Judgment?
Four ways to get rid of an unsatisfied civil 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. They can see if they can get it vacated. We will cover how to get a civil judgment vacated in future blogs. John Strange, a senior loan officer at Gustan Cho Associates, explains about getting mortgage approval with unsatisfied judgments as follows:
Another way of getting rid of an unsatisfied judgment is by negotiating with the judgment creditor on accepting a certain percentage of the judgment. Consumers can eliminate judgments by settling them where the debtor has no more liability. Ensure to get a final payoff letter and a release to record the judgment as satisfied on public records.
The third way of getting rid of unsatisfied judgment is filing for Chapter 7 bankruptcy. Chapter 7 Bankruptcies Wipe out unsatisfied judgments. Consumers will no longer have 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 a credit report for seven years. However, most judgments are good for ten years from the judgment’s entry. It depends on which state the judgment was entered. Most states also give the judgment creditor an option to renew the judgment for another ten years. For example, here is a case scenario: 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.
Qualifying For Mortgage With Unsatisfied Judgments Without Filing Bankruptcy
The answer to this question is YES!!!! Borrowers can get mortgage approval without filing for bankruptcy if they have unsatisfied judgments. Most lenders do not like the idea of unsatisfied judgments. However, if borrowers have a payment agreement with the judgment creditor and have proof of making three continuous monthly payments, borrowers will qualify for a mortgage.
Borrowers must provide the settlement agreement and three months’ worth of canceled checks or bank statements.
Borrowers looking for a direct lender with no overlays, please get in touch with Gustan Cho Associates. Please contact us by calling us at 800-900-8569 or texting us for a faster response. Or email us at gcho@gustancho.com. We are available evenings, weekends, and holidays seven days a week.
Publish On: June 24, 2023 And Last updated On: July 4, 2023