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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 110506
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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I am purchasing my first home. I had defaulted on my student

Customer Question

hi I am purchasing my first home. I had defaulted on my student loans and stopped paying credit cards a long time ago. everything became so over-whelming and I just gave up. my credit was shot and I gave up all hopes of owning a home. after many years my school loans were sent to collections and discharged. also same things happened to my credit cards and there were judgements made against me that also appeared on my credit reports. after about a decade all the information regarding my school loans that were in default and charged off, the judgements against me and any late payments etc were taken off my credit report. that jumped my credit from a 550 to 770 after a couple years of getting secured credits and building good credit. now I am in the process of getting a home. I got pre-qualified for a home and found a house and started the process. most of the paperwork is already filled out by them and I am basically signing. as I am going thru the paperwork from my lender there is a Uniform Residential Loan Application where it says Are there any outstanding judgments against you? Have you directly or indirectly been obligated on any loan which resulted in foreclosure, transfer of title in lieu of foreclosure, or judgment? (This would include such loans as home mortgage loans, SBA loans, home improvement loans, educational loans, manufactured (mobile) home loans, any mortgage, financial obligation, bond, or loan guarantee. If “Yes,” provide details, including date, name and address of Lender, FHA or VA case number, if any, and reasons for the action.) Are you presently delinquent or in default on any Federal debt or any other loan, mortgage, financial obligation, bond or loan guarantee?
the moment I realized that these were marked no I called my lender and explained to him that the info was incorrect. I explained my situation to him letting him know that I stopped paying my school loans over a decade ago and they were reported discharged on my credit report and was taken off probably cause of the statue of limitation and the same for my credit card judgements.
(I also told him about a garnishment on my paycheck that started right when I started the home buying process and he explained that it was ok and that they would just take it against my income as debt)
he thanked me for providing him with this information. than he explained that I don't need to include any information about my old unpaid school loans or judgments against me cause they were no longer in my credit report and was needed by them.
I want to make sure I'm not breaking any laws or anything. i have expressed again my concern and told him that i would like to include that information and whatever needed from me and he has again assured me that i have nothing to worry about and that he doesn't need me to include all that info cause its not on my credit report. so is what he is saying ok? am i ok to go thru with this house loan?
Submitted: 2 months ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 2 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
If the loans were discharged but were in default on the loans and the application asks if you ever had such a default, then you should have put it on the application. At this point, since you notified the broker, you need to send it to him in writing that you inadvertently forgot to put those on the application and that would absolve you of any claims of fraud later. If you do not do so, they could seek to deny the loan or put it in default later if they claim you purposely did not disclose and by sending it in writing to the broker you clear yourself from any claims of wrongdoing.