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Can I get a mortgage with a settlement form a bar fight against me?

I am looking to get a mortgage ( probably FHA loan). About 2 years ago I had a settlement of $120,000 against me from a bar fight ( I didn't have lawyer and got railroaded). My fiance and I want to get a home but are unsure if my judgment will not allow us to. I can not pay it off and I offered him less money then it was worth at one point and they denied it.When the mortgage broker ran my credit she said it did not show up on there? Is this normal for a settlement not to show up on my credit report? When the do the final process will it stop me from getting the mortgage, I am not going to lie, I am going to be up front that I have it. I would just hate to get so far and be shut down last minute. Please help? by jersey_684_446 from Jackson, New Jersey. Feb 26th 2013 Reply


William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,000 contributions

All conforming loans require the FNMA 1003 Residential Loan Application. On page 4 under the section labeled "VIII Declarations", item "A" asks if there are any outstanding judgments against you. If you mark this box "Yes".. Then you cannot get a loan unless the judgment is satisfied.. It does not matter what other loan officers have told you or not, and it doesn't matter if it shows on your credit or not.. if you mark the box "Yes", you won't get a loan.. That being said, and as Tom Stated... if you "Settled" your case, and there was never a "Default Judgment" then it's not a judgment.. And you can truthfully enter "NO"... as others have stated... you can have a title company do a search on you and see, but really you should just sit down with a local broker and let him go to work for you.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Feb 26th 2013
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Thomas Worsfold (TomWorsfold)
#48 ranked lender in Michigan - 7 contributions

Jersey, It sounds like a judgment to me, but I agree with JaimeLynn, only way to know for sure is to get a search.. The circumstances leading up to that judgment are not relevant in regard to your eligibility for a mortgage. The only way to re-argue those points is to try and get the matter re-opened, and you would be best served speaking with a New Jersey attorney about that.

Feb 26th 2013
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Dave Pressel (DavePressel)
#93 ranked lender in New Jersey - 12 contributions

It is irrelevant whether it shows up / does not show up. On the mortgage application, Section VII -- the first question is "are there any outstanding judgments against you?" If you answer no when you know the answer is yes, then that is fraud and you risk going to jail. It is just my opinion, but buying a house is not worth going to jail, so I applaud you for being upfront about it but you would have to answer that question "yes" and that would most definitely cause an issue.DP

Feb 26th 2013
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Peter Savino (855411LEND)
#100 ranked lender in New Jersey - 332 contributions

PLease call me 855 411 LEND - i can help - Peter I am located in Freehold,

Feb 26th 2013
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Jericho Cherry (Jerichocherry)
#58 ranked lender in Virginia - 1,107 contributions

Good morning, If it does not show up on your credit it should not be a problem.

Feb 26th 2013
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Dave- So there is no chance I can get a mortgage with it on there? I was told by a mortgage broker I still can, is she giving me false information?

Feb 26th 2013
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Dave Pressel (DavePressel)
#93 ranked lender in New Jersey - 12 contributions

If you tell the truth (and answer "yes"), how can financing go through? Fannie, Freddie and FHA require judgments to paid in full as they are viewed as a risk to the 1st mortgage. And I reiterate: the judgment not showing up on your credit report does not mean that it is not a problem. Please tread carefully.....DP

Feb 26th 2013
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Dave Pressel (DavePressel)
#93 ranked lender in New Jersey - 12 contributions

If you get a settlement and judgment is paid in full (whether it is for $1 or $120K), then financing is thern not an issue as long as your income, assets and credit score fit the guidelinesDP

Feb 26th 2013
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Dave- Then why am I getting different answers from many different people, some people on here say yes I can as well as the lady I am speaking with, then you and a few others say no. I can not seem to get a 100% definite answer lol

Feb 26th 2013
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Dave Pressel (DavePressel)
#93 ranked lender in New Jersey - 12 contributions

This is from Fannie Mae: "Judgments, garnishments and liens must be paid off at or prior to closing. Documentation of the satisfaction must be provided. Accounts that are past due (and not yet reported as a collection account) must be brought current. No payment plans allowed."Not my rules....just sharing info. So unless someone has a special way to circumvent every lending guidelines out there, I would trust the people that tell you not get it paid / settled.DP

Feb 26th 2013
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So I am certainly beat since I can not pay off that settlement?

Feb 26th 2013
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Barb Lanis (BarbLanis)
#72 ranked lender in Illinois - 662 contributions

Take Dave's advice. You have to answer truthfully since the risks are huge if you lie. Keep in mind that even though it may not show up on your credit report, there are also other fraud searches done by the underwriter that will likely reveal it anyway. It's really quite naive of that broker to think that the only "search" going on is at the credit report level.

Feb 26th 2013
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Joe Shamie (Joe Shamie)
#5 ranked lender in New Jersey - 1,412 contributions

What Dave is telling you is 100% accurate

Feb 26th 2013
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Jericho Cherry (Jerichocherry)
#58 ranked lender in Virginia - 1,107 contributions

Just to clarify things, I never said it would not be a problem,what I said was that it should not be a problem. The only way to know is to start the process and see what happens. HONESTLY is ALWAYSTHE BEST POLICY. Never try to conceal anything. ALWAYS TELL THE TRUTH and hope for the best. Since it's not showing on your credit report it MAY NOT BE a actual judgement out there against you. Hope this helps.

Feb 26th 2013
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I read here http://avenue-s.us/freddie_mac_and_fannie_mae_underwriting_comparison_guidelines.pdf that it is up to the underwriters discretion to give me the loan or not under the circumstances? Is this correct, and who would the under writer be?

Feb 26th 2013
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Joe Shamie (Joe Shamie)
#5 ranked lender in New Jersey - 1,412 contributions

No underwriter will approve a loan with an open judgement since it will only be a matter of time befroe the crditor attaches that judgment tot he house which is the bank's collatteral.

Feb 26th 2013
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Is it not true that a judgment can not be attached to the house unless you sell it for property or you own the house outright?

Feb 26th 2013
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,553 contributions

You are not going to get mortgage financing with that sized judgement against you. It will very likely show up in any data verify search, and it should show up in a title name search. You may be able to initially fool a lender, but expect it to pop up during the process.

Feb 26th 2013
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Can I get a title search before I go through a whole process of looking and what not? What advice can you give me besides pay the ;loan off because he will not take anything but the full amount. Can I get a home in a different state the judgment was done in?

Feb 26th 2013
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Joe Shamie (Joe Shamie)
#5 ranked lender in New Jersey - 1,412 contributions

It doesnt matter what state you buy in.

Feb 26th 2013
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Jamie Edwards (JamieLynn)
#37 ranked lender in New Jersey - 13 contributions

Quick question...are you making payments on this settlement? Also, it would be in your best interest to get a title search to see EXACTLY what appears, and how it appears. That will make the difference. Like many others have said, I commend you on your honesty. There are still people out there who wouldn't do the same. Feel free to give me a call to discuss further. 856-853-1234 Good luck to you and your fiance!Jamie

Feb 26th 2013
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Thank you Jamie, No I am not paying on the settlement. how do I go about doing a title search so I can figure this all out before I get in deep

Feb 26th 2013
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Jamie Edwards (JamieLynn)
#37 ranked lender in New Jersey - 13 contributions

Simply contact a local title agency, or ask your current mortgage broker to do so. They should deal with someone on a regular basis. It may cost about $200 to do so, but it will save you a lot of aggrevation.

Feb 26th 2013
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Thomas Worsfold (TomWorsfold)
#48 ranked lender in Michigan - 7 contributions

Jersey,I believe I bring a slightly different perspective to this discussion because in addition to being a loan officer, I am also a licensed attorney. The reason I think you may be getting contradicting responses to your question is that there is a distinction between a "judgment" and a "settlement." Judgments are the result of a court Order and are well-documented public records that will not escape a title search. A settlement, on the other hand, is an agreement to dismiss a lawsuit, thus by definition not resulting in a Judgment. Further, the terms of a settlement agreement typically include no admission of liability and a confidentiality clause. The settlement is akin to any other personal contract. The only way for the settlement to turn into a judgment is if the language of the settlement provides a default-judgment as a remedy for breaching the agreement, or a separate court action for breach of contract. In any event, you would not have to disclose that settlement as a "Judgment" on your loan application (assuming it is in fact a settlement; you should consult your attorney to make sure), and it should not prevent you from obtaining a loan.

Feb 26th 2013
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Hey Tom, When I look it up online I can find it in a judgment search, does that mean its a judgment or can it still be a settlement? If it is a judgement I cant get a loan but a settlement I can?

Feb 26th 2013
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Thomas Worsfold (TomWorsfold)
#48 ranked lender in Michigan - 7 contributions

Jersey, it really depends. If it shows as a judgment, it is unlikely you will be able to get a loan. If it was a true settlement, (you and the plaintiff agreed to settle the case before it reaches its conclusion in court) the court record would likely show that the case was dismissed and there would be no public record of the settlement or the terms of the agreement. Did the case go through the court until either a judge or a jury awarded the plaintiff $120,000? If not, was there a term in the settlement language allowing the plaintiff to docket the settlement as a judgment in the event that you did not pay?

Feb 26th 2013
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I went to court and the judge said either he chooses the settlement amount or the plantiff and myself figure it out, so we did so right in court, they gave me a number and I agreed to it ( I did not have a lawyer). then we all signed a piece of paper. They have not garnished wages or anything yet ( knock on wood) and I do not think they said anything about if I do not pay. The judge made a statement that if I were ever to come into money I would have to give it to him because more then likely with my earnings and things I have to pay for I won't be able to pay him

Feb 26th 2013
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Also, I was in florida and never recieved the paperwork that I had to go to court, they were sending it to my aunts in jersey, once I moved back to Jersey, she showed me a paper that I had to attend 2 days later or else I was in default. I tried to postpone it and talk to the plantiffs lawyer but they did not want to hear it and said I had to show. I couldn't understand why they didn't send me my paperwork to florida I was on Probation for the fight and they had my new address

Feb 26th 2013
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Jamie Edwards (JamieLynn)
#37 ranked lender in New Jersey - 13 contributions

Get the title search. Actually it's a judgment search. That is the only way to know what you're up against. If a judgement was awarded in civil court and it shows up in the search, you will have to pay it before getting any loan. A lender will not subordinate to a judgment.

Feb 26th 2013
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Yes, I looked it is a judgment, I can get the case reopened?

Feb 26th 2013
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Josh Lund (Josh_Lund)
#47 ranked lender in Minnesota - 113 contributions

Other options would be to see if your fiance will qualify on her own or you could find a co-signer to help her until the judgement's been satisfied.

Feb 26th 2013
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Peter Botros (PeterBotros)
#72 ranked lender in New York - 895 contributions

Can Your Fiance qualify on her own?

Feb 26th 2013
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Her credit score is good but income is only 26,000 a year as mine is about 50K. She would only get approved for like 100k I believe, we need at least 175

Feb 26th 2013
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Michael Diaz (sincityloandr)
#59 ranked lender in Nevada - 25 contributions

If it isn't against title we would hit you for the monthly payment that our uw would calculate

Dec 1st 2016
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Corey Vandenberg (Coreyv)
#66 ranked lender in Indiana - 15 contributions

Wow! Give us an update, what did you decide to do? You might have considered a contract sale and then refinance later...

Oct 19th 2017
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