Homeowners in Pennsylvania work hard to maintain their homes. This hard work isn’t only in the form of routine housework and maintenance, homeowners work all week to provide for their family and keep their home. Unfortunately, sometimes life events such as a serious illness, an injury, or the loss of a job can make it difficult or impossible to keep up on mortgage payments. Over time, you may fall further and further behind until you begin to fear foreclosure.
Homeowners who have fallen behind paying their bills or mortgage are understandably anxious and apprehensive about what to expect. In truth, exactly what you can expect from the foreclosure process comes down to the facts and circumstances you face and your willingness to be proactive and pursue relief. Discussing you concerns with an experienced bankruptcy attorney who can suggest strategic legal means to stop foreclosure and avoid a deficiency judgment should occur as soon as possible. A bankruptcy and Philadelphia foreclosure lawyer of Sadek & Cooper may be able to help. Call 215-995-2543 today to schedule a free and confidential consultation.
The Foreclosure Process Always Comes First…
Since a deficiency judgment petition first requires the mortgage holder or lender to be granted a judgment for the property, a deficiency judgment against the homeowner cannot be sought until the foreclosure process is complete. In Pennsylvania, foreclosures are judicial in nature. This means that all foreclosures are required to proceed through a court-supervised process.
The court-supervised process requires the homeowner to be notified of the impending foreclosure. Under Pennsylvania law, a lender must provide a Notice of Intent to Foreclose, or Act 6 Notice, no less than 30-days prior to the foreclosure. Additional notifications, including an Act 91 Notice, are also required to be sent. While additional timing requirements exist, the foreclosure process will eventually end with the lender being granted a judgment for the property and a sheriff’s sale where the property is sold to the public to compensate lenders.
…After the Sheriff’s Sale Lenders May Sue for a Deficiency Judgment
Following the sheriff’s sale, the lender is likely to assess the sale price versus the underlying obligation. If the price the foreclosed home sold for plus equity is less than the loan or mortgage, then the lender has the option of seeking a deficiency judgment. While the lender is not required to seek compensation for the deficiency and the homeowner may well negotiate this fact as part of a short sale or deed in lieu of foreclosure settlement, certain timing requirements apply.
The lender is required to bring action for deficiency judgment within 6 months of the foreclosure sale. 42 Pa. Con. St. Ann. § 5522[b]. The action must be brought in the Court of Common Pleas in the county where the real property is located. The first duty of the court is to determine the property’s fair market value. If the fair market value of the property is greater than the sale price, then it is likely that a deficiency amount exists. As such, homeowners often challenge the fair market value determination and will present evidence that the property is not worth the previously assessed value.
Work with Experienced Pennsylvania Mortgage Foreclosure Defense Lawyers
The Philadelphia deficiency judgment defense lawyer of Sadek & Cooper are committed to protecting the hard work and labors of homeowners in Pennsylvania. Therefore, we work to strategically stop foreclosures and subsequent deficiency actions that can pile on debt. We understand that your home is your most valuable asset and work to protect it from creditors. If you are facing a home foreclosure, we can work to stop the foreclosure in its tracks and give you more time to catch-up on payments in arrears. If your home has already been foreclosed and you are facing a deficiency judgment, your options to stop this subsequent judgment are more limited but state court litigation strategies may prove for a window of opportunity.
To discuss your options when facing foreclosure, call the bankruptcy lawyers of Sadek & Cooper for a free and confidential legal consultation. Call 215-995-2543 today to schedule a free and confidential consultation at Sadek & Cooper’s Philadelphia, Bucks County, Delaware County, or New Jersey law offices.