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Can anyone help me sort out judgement confusion and VA


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Can anyone help me understand? We foreclosed and received deficiency judgement (in South Carolina) in August of 2010. I won't go into why we foreclosed except to say we were sickened by it and tried to work with the bank but they refused.

Almost 8 weeks ago we applied for VA loan via Navy Federal Credit Union. We were pre-approved. Question: Who gave the pre-approval, the VA, since they will be backing the loan, or our lender NFCU? I ask because I have since read that if there is an unpaid judgement in public records that the VA will not approve. However, we were pre-approved. (We were not aware of the dollar amount of judgement when we applied, by the way)

This is where it gets tricky: The foreclosed home sold in June/July of 2012. We found out via our old neighbors. We KNEW we had a deficiency judgement, so we just waited...and waited...and waited for GMAC or a collection agency to contact us via phone, mail, or sheriff delivered notification. We have not heard anything! Nothing!

So, we apply for the VA backed loan via lender NFCU. We get the pre-approval. We knew that "Foreclosure" was on my husbands credit report. However, there is no mention of a judgement in the public records portion of our credit report. We were totally honest with the loan officer and answered all of her questions regarding our foreclosure.

Here we are 2 days from closing on a home (husbands credit score averaged between the 3 companies - 720, no late credit card payments, he makes plenty of money - everything looks great, no other dings at all on his credit). However, how can we get this far along in this closing process when our closing attorney found our judgement amount of 122k, but the VA or NFCU did NOT????

I am fully expected to get the denial of loan phone call at the 11th hour. I have accepted this. However, how can the VA and NFCU allow weeks of the closing process knowing (they have to know, right?) of that judgement amount? By the way, March 12th was the first time we heard about the 122k. Like I said, we have never been contacted.

I'm sorry for being wordy after all. I'm just trying to explain my confusion without confusing the person willing to help me understand what's going on.

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OR since GMAC, or a collection agency, has not actively pursued executing the judgement (come after us), is that not a concern for NFCU?

When I found out about the $ amount from my attorney on the 12th, he said it should not stop us from getting the home. He said it was not a risk for NFCU. He said a lien would be placed on our home and we would not be able to sell or refinance it. That's it. Of course, i understand, he's on the law side of things and not an underwriter.

Our closing date is this Friday, the 22nd. I assume tomorrow we get the ax. I just can't believe it's taken VA/NFCU this many weeks without having killed our loan package.

Any thoughts please?

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