My friend just had a 5 figure child support arrears judgment entered against him about 3 weeks before he is supposed to close on a house. The judgment gives him 60 days to pay the mother of the children directly. Does he have to disclose this judgment to the lender? If not, should he wait until after closing (still within the 60 days) to pay the mother the full amount so there won’t be any large transactions from his bank account? I believe it’s a VA loan.
Child support judgment issued before home closing
byu/Ill-Peak3008 inRealEstate
Posted by Ill-Peak3008
10 Comments
They are probably gonna find out anyway. They’re likely to run his credit before closing, and they’re going to find it. Be upfront with a lender.
Yes, he should disclose this ASAP. And he needs to start paying his child support. That should be the first priority over buying a home.
If your friend owes 5 figures in back child support he has no business buying property.
And yes he needs to disclose.
5 figures wow. That could be $10,000 or $99,999.
So he has the money to pay his arrears yet he still let it go so far that he now has a judgement against him? To be honest I think he deserves to feel the consequences of his actions.
Yes, a judgment generally **must be disclosed to a lender**, particularly when applying for a mortgage or a large loan. While civil judgments no longer appear on personal credit reports (as of 2017/2018), they remain in public records and are routinely discovered during a lender’s background check or title search.
Definitely going to find out. I just closed on a new home. Opened new credit card with furniture company with 0% interest for a year. Bought furniture that would take 3 weeks for delivery.
Mortgage company called to ask about it. A 3rd party company had to investigate and have a call with myself and Wells Fargo the credit card backer. Since the billing cycle had not yet passed my balance was Zero until a month after Closing Date. Closing went smooth, no issues.
I suspect he not only needs to disclose it, he will need to pay it off or he’s not getting a loan. I would ask the lender though.
Lenders usually don’t want to make a loan if there’s a chance a judgement can get attached to the house later. And child support can definitely get attached.
OK, I’ve read the comments and gather that this is in the low 5 figures and that he was up to date on payments but that there was a recent recalculation of past payments and that has generated the judgement.
He should contact his loan officer, disclose the judgement, discuss if he has enough money on hand to pay off the judgement and still close on the house and how best to proceed.
He needs to tell them because this is effects both his liabilities and his assets he previously disclosed as part of his application and documentation and he’ll have to certify again to those amounts at closing.
Yes, he would have to disclose asap as this will be part of the lender’s conditions prior to closing on the loan.
The good news for VA buyers, they don’t need a downpayment as it’s a 0% DP loan.