Regarding the difference between the Protestant view of “declared righteousness” and the Catholic view of “infused righteousness,” Evangelical Roger Wagner writes:
It has been pointed out repeatedly that even if one grants that justification is based on the inherent righteousness (or on the “infused grace” – produced righteousness) of the person justified, the act of justification can, nevertheless, be nothing other than declarative. Just as “condemn” cannot mean “to make sinful or criminal” so “justify” (its consistent biblical antithesis) cannot mean “to make just or righteous.” The categories are inescapably ethical and legal, not metaphysical. (Roger Wagner, “New Confusions for Old: Rome and Justification,” Antithesis, Vol. 1, No. 5, September/October, 1990, p. 30)
The problem with Wagner’s reasoning is that he does not take it to the next logical step. It is much more reasonable to understand that one is declared righteous because he is intrinsically righteous, rather than to say he is declared righteous but he is not righteous in reality. In everyday law courts, a judge or jury never declares a defendant righteous or not guilty when they know that he is unjust or guilty. Why would God be expected to do anything less? The New Testament, except when it is specifying the source or basis of justification (e.g., “blood” – Rm 5:9; “grace” – Ti 3:7), contains no passage which grants justification unless it is recognizing some intrinsic quality in the individual, whether it be faith or works. God forgives the individual’s sins because of the individual’s intrinsic faith in God (e.g., Rm 5:8), a faith that is tested many times (e.g. Rm 4:18-21). If God “considers” the individual righteous, it is not because he merely thinks of him as righteous while really knowing that he is unjust. In the same way, God “declares” one condemned not because he has no criminal or condemnable qualities, but precisely because he does. (Robert A. Sungenis, Not By Faith Alone: The Biblical Evidence for the Catholic Doctrine of Justification [2d ed.; State Line, Pa.: Catholic Apologetics International Publishing, Inc., 2009], 319 [print ed.])
Sungenis also has the following comment about the necessity of "faith" and the problem it poses for a consistent Reformed theology:
Why is Faith Necessary?
One of the main problems with the theory of imputed righteousness is that it ends up proving too much. If we carry the theory of imputation to its logical conclusion, then there should be no reason why the individual must exhibit faith as a prerequisite for the imputation. If the process is all God’s, then he would just impute righteousness to the individual and the matter would be over. Any faith or works that came from that imputation would merely be the result of God’s action but not a prerequisite for God’s action. This presents a huge problem for the imputation theory for the theory holds that those who do not exhibit faith cannot receive the imputed righteousness. To compound the problem, the Protestant understanding requires a high quality of faith in order to appropriate the alien righteousness of Christ. For the Protestant theory to be compatible with the teaching of James, the individual’s faith must be of such a measurable quality that it is then, and only then, able to be the instrument to receive the alien righteousness of Christ. (Robert A. Sungenis, Not By Faith Alone: The Biblical Evidence for the Catholic Doctrine of Justification [2d ed.; State Line, Pa.: Catholic Apologetics International Publishing, Inc., 2009], 321 [print ed.])