Can I apply for a home loan if being sued for an MVA?

UPDATED: Oct 1, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Oct 1, 2022Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Can I apply for a home loan if being sued for an MVA?

I was in an MVA 2.5 years ago and the gentleman decided to sue two weeks prior to the claim closing when notified of end of statute. Nothing was heard from him prior despite my previous insurance company trying to contact him. He is asking for 303,000 and this is above my policy limit.

My husband and I own our own homes and would like to sell both and purchase one together. Is this suit against me going to be a problem in me applying for a home loan?

Thank you.

Asked on October 2, 2018 under Real Estate Law, Oregon


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Legally, can you apply for a home loan? Yes--the MVA or the pending suit does not bar you from seeking one.
But clearly, any lender will consider the lawsuit in whether or not (or how much) to lend you: if you are being sued for $303,000 and that is above your policy limit, the excess over you limit is a potential debt or liability of yours that, if you lose the case and have to pay, will clearly negatively impact your ability to pay your loan. Depending on how much is in excess of your policy, this might make you someone that no one wants to lend to. (Obviously, there is a difference between having a $300k policy limit, so only $3 is at stake; a $250k limit, so you might be liable for $53k; a $100k limit, so you could owe $203k; etc.)
And if you do not disclose this amount on the loan application and it comes out later, you will have committed fraud in applying for the loan, which could result in the lender calling the entire amount due immediately and/or pressing criminal charges.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption