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Can an outstanding lawsuit affect me getting a mortgage?

I was in a traffic accident and the injured party is filing for medical costs in total of 20k and I'm about 2-3 weeks away from getting a mortgage. Can this hurt my chances at a mortgage or is this completely irrelevant? by thacar_662_597 from Pittsburg, Pennsylvania. Dec 21st 2011 Reply


Jeff Cost (midwestlender)
#40 ranked lender in Ohio - 164 contributions

There is a question on pg 3 of the loan application that asks if you are a party to a lawsuit? If you answered no at time of application and you were actually involved in the lawsuit at the time you gave false information on the loan application.With all that said it should not affect your mortgage. If you had car insurance at time of accident then $20,000 would more than likely be covered by insurance. Consult with your insurance agent and your attorney. ENG Lending, A Division of Bank of England, always puts your best interest first. We would appreciate the opportunity to serve you. Please visit us at www.cincinnatimortgagerate.net. You will soon find that we are so much more than a Mortgage Banker; we are a company that is dedicated to empowering our clients and referral partners. Don't forget to visit our Facebook Fanpage at http://www.facebook.com/pages/ENG-Lending-Cincinnati/171183536269710?sk=wall Or Call Anytime 513-403-6260

Dec 21st 2011
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Paul Klaas (paul@paequity.com)
#21 ranked lender in Pennsylvania - 9 contributions

Hi Sorry to hear about the accident. Hope everyone is ok. I had a mortgage that just closed where there was a mechanics lien filed at courthouse from a builder who built the house years ago. It HAD to be cleared because it affected title and was recorded prior to any searches. You MAY want to check your limits of liability on your auto insurance declaration page to see how much liability coverage you have (I also am a licensed Property and Casulaty agent) however I am not sure how quick that would get publically recorded OR if that is title affecting. I would say that it may be IF recorded BEFORE the title search is done. Let us know how it works out and if you get a definite answer.Again, I hope everyone is ok from the accident.SincerelyPaul KlaasPresident/CEO412.559.4030Pennsylvania Equity Mortgage, IncAllison Park PA 15101www.paequity.comLicensed by the Pa Dept of Banking

Dec 21st 2011
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Bert Carpenter (BertCarpenter)
#38 ranked lender in Arizona - 1,823 contributions

Unfortunately, yes. Having a lawsuit filed against you can create underwriting issues for you. It could also derail your ability to get loan approval. The risk to the lender is based on your ability to pay the judgment should you lose the case. Some factors that can mitigate or minimize your risk is the amount and type of insurance you have. If you were properly insured and the level of coverage sufficient to satisfy a judgment, should the courts rule against you, then you would most likely be required to provide evidence of the same. My best advice is to contact a local Mortgage Banker/Broker, rather than one of the big banks. Unlike a bank employee, who is most likely just an order taker, a Mortgage Broker/Banker is Trained, Tested and Licensed in all aspects of Mortgage Origination. He/She will have access to loan products of many lenders, not just those of one bank. More importantly, they will be able to help you determine the type of documentation you will need to provide so underwriting is comfortable that the lawsuit will not jeopardize the new loan.

Dec 21st 2011
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Geoff Longwell (glongw_557_660)
#45 ranked lender in Pennsylvania - 7 contributions

I would suggest that it certainly could, however the devil is in the details. PA is a first party medical state for car accidents, meaning that the injured's own auto insurance policy pays the first $5,000 of medical bills due to injury by auto-no matter who is at fault. He could be walking down the street, get hit by a car, and his own auto policy picks up the first $5k. Yes it sounds ridiculous, but that's the P&C law in PA. If he doesn't have his own auto policy but he resides with someone that does, that policy must pay the first $5k. If that's not the case his his own major medical insurance picks up the tab for cost above and beyond that. That major medical then may come back and sue you and/or your auto policy to get their $ back. He may not have auto coverage. He may not have major medical. You may have state minimum bodily injury limits, 15/30, which means you could be on the hook for $5k. You provided too little information for me to make a reasonable informed recommendation here. Could it hurt your chances? Yes. Will it? Some of this needs to be worked through before determining that. My guess is he doesn't have auto insurance/major medical or they would have paid out already and he would have no reason to sue you. Unless he's suing you not for medical costs, but bodily injury liability. Either way, if I can be of further assistance don't hesitate to contact me. www.englendingpa.com

Dec 21st 2011
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I have traffic accident and opposite party do low suite on me of $500000 and my insurance limite is $100000.and I apply for the mortgage . So it will effected to getting loan?

Jul 19th 2013
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