We are currently wanting to sell our house, we have a judgement on our credit rating, this judgement is currently under appeal and awaiting hearing. The judgement has never been registered as a lien against our home, or any property that we own, the mortgage broker we applied with has told us the judgement has to be paid out of the sale of the house, does anyone know for sure.

If this is under appeal than you don't have to pay it until the matter has been settled by the court.

If you sell your house prior to that than the broker is incorrect, it doesn't have to be paid.

If you were the buyer I would understand that.

When a title search is performed the title agency also does a judgment search. This is where they get a list of all judgments in state and federal courts. That's where this judgment is showing up and it acts as a lien against the property. If you show proof to the title agency that the judgment is being appealed then in most cases the title agency will remove the exception and allow a closing to proceed as long as you put the amount of the judgment in escrow until the appeal is resolved. So you don't have to pay it now but you do have to put the money aside just in case you lose the appeal.

I am sorry, you are wanting to "sell" your house, why are you talking to a mortgage broker, is this to buy another house?

If you have a judgement in dispute, you may have a hard time getting another loan, since if they win, that can end up a lien on the new property.