Our inquiry resulted in learning that court records, judgments and liens definitely affect a consumer's ability to obtain a home mortgage but that it depends on whether the court records, judgments and liens were satisfied (paid) and whether the mortgage was for a home purchase or to refinance an existing mortgage.
BUYING A HOME: NEW MORTGAGE
What we discovered is if a consumer is BUYING a home, any unsatisfied court record, such as a tax lien or judgment, will become an obstacle to being approved for a mortgage. The consumer must be willing to resolve any unsatisfied court record, such as a tax lien or judgment prior to obtaining a mortgage to purchase a new home. Competent brokers accustom to dealing with unsatisfied court records have access to services such as re-scoring that improves the chances for approval once the court record is resolved and speeds up the process significantly.
If the court record, such as a tax lien or judgment, is satisfied (paid), competent brokers accustomed to dealing with court records and have access to services such as re-scoring can speed up the approval process significantly. Sometimes even just showing your broker that you have satisfied the lien or judgment will clear the way to approval.
REFINANCING AN EXISTING MORTGAGE
Consumers REFINANCING their existing home loan had an easier time qualifying for a new mortgage assuming the equity in the home was sufficient to satisfy the court record, such as a tax lien or judgment. It is recommended that consumers dealing with court records, judgments and liens seek a competent broker that is accustom to dealing with court records, and has access to services such as re-scoring so that once the judgment or lien is satisfied, the credit bureau will be updated and the credit report accurately reflect the court record as "satisfied".
