A legal decision; when requiring debt repayment, a judgment may include a property lien that secures the creditors claim by providing a collateral source.
Judgment is granted to a creditor who has proven in a civil court that a debtor is liable for damage. When the creditor cannot collect the judgment from the debtor, or when the judgment amount is not significant enough to warrant a collection process, the creditor usually files a lien on the debtor's property. Such judgment lien is present on the property title report when the debtor refinances or sells his property. The debtor must satisfy any liens on his property when he refinances the mortgage or sells the property. A judgment lien filed by a professional who performed work on the property (such as builder contractor) is often referred to as a "mechanic's lien".
Some judgments may show up as a "cloud" or lien on the title to a property owned by the judgment debtor, others may not. The procedure to have a judgment attached to the title will vary from state to state. For example, in California you must record an "abstract of judgment" in order for a judgment to attach as a lien to any real property owned by the debtor.
Always consult your mortgage broker as to which actions should be taken in regards to the judgment.
Although there are lenders who will allow the judgments if they are subordinated to the second position.
Lenders typically require that all judgments that effect or potentially effect the title be paid prior to the closing of a mortgage loan.
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