Do non-money judgments hurt one's credit?

Factual Questions
1

As a bit of background to this question:
I am a real estate attorney. So, in light of the current economy, and in the interest in securing some job security, I now work at a law firm which represents banks in foreclosures.

In a foreclosure lawsuit, in which we foreclose on the mortgage and the property gets sold at the courthouse steps to pay off the debt, we must sue every person who has an interest in the property.

This includes, naturally, the owner(s) of the property. But it also includes any person with possessory rights (i.e. a tenant), and any person who may have a money judgment against the owner of the property. It also would include anybody who tried to previously convey their interest in the property (i.e. through a deed), but who didn’t comply with all the laws relevant to that transaction.

Invariably, these latter types call our office in a huff, exasperated that they are being sued. “But I didn’t borrow any money from the bank!” they say. I explain to them that we are not seeking any money from them, but are merely foreclosing their interest in the property (i.e. as to a creditor, we are not extinguishing their judgment, but merely foreclosing their right to enforce that judgment against the property).

What we are doing is required by law, but it seems to really bother people primarily because they fear being listed as a defendant in a lawsuit, and having a judgment rendered against them. There is an overriding fear that such a judgment will hurt their credit.

Is this true? Does a non-money judgment hurt one’s credit (for clarification, a judgment of foreclosure does include money equaling what the bank is owed, but that money represents a lien on the property that is satsified by the foreclosure auction; any deficiency between what is owed and what the house is auctioned for can only be sought from the person who signed the note)? Would it require some sort of explanation from the person to clear up the confusion? Do the credit agencies differentiate between a lawsuit in which you owe money and one in which you are named for some other purpose (i.e. I don’t assume a restraining order would hurt one’s credit)? If it does hurt your credit, how long does it take to be removed from your history.

Thanks for the straight dope on this one. Inquiring minds (well, me) want to know.

2

I don’t know about one’s credit history with the credit bureaus, but sometimes one will have a litigation search done against them, and with the ease of computer access to court records, I’m sure that this will become more and more common.

I know that there are services which search court records for landlords and flag tenants who have eviction proceedings against them (I don’t know whether they also pick up other civil litigation). There was a bit of a flap about this in New York because these agencies had picked up landlord/tenant court filings, but did not further report on how they were resolved, leaving even people who won their cases with a blot on their records at the agencies.

Further, certain applications (like for the bar, among other things) will ask if you’ve ever been a party to any civil litigation, forcing you to explain yourself.

In short, being sued for whatever reason, however innocent, will likely stick on your “permanent record.”