This file is credit approved with a full LESA. The borrowers have an outstanding judgement for $7227.00, which only appears on their credit report, not on title. The borrowers do not have the funds to pay off the judgement. Can we allow them to pay it off through closing?
- If judgment is not attached to the property it is not considered a mandatory obligation and pay-off will not be allowed at closing.
- If the judgment is reflected on the credit report (not on the title), then evidence of a minimum of 3 months timely payment history along with a copy of the agreement or evidence of payment in full prior to closing the loan (HECM proceeds cannot be used unless it is a lien secured on title).
- If the judgment is attached to the subject property, payoff will be required through escrow at closing, as it would considered a mandatory obligation.