In our country’s economic climate, it is common for Pennsylvanians to fall behind on financial obligations like paying off college loans, utility bills, and mortgages. Defaulting on mortgage payments is a very serious matter, as no one wants to find themselves or their families without a place to call home. If you are a resident of Pennsylvania, and you have fallen behind on your mortgage payments, it is important to know the laws surrounding defaults on mortgages so that you can prevent your home from being foreclosed. If you live in Southeastern Pennsylvania and are concerned that your home may be foreclosed on, call Sadek and Cooper today to speak to one of our Philadelphia mortgage foreclosure attorneys in a free consultation.
How Does Home Foreclosure Work in Pennsylvania?
Most lenders will allow for a 15-day grace period after a missed payment on a mortgage. The foreclosure process cannot begin until an individual has fallen 30 days behind on a missed payment.
At this time, the service lender will send a written notice of default. Specifically, an Act 6 or Act 91 Notice of Intention to Foreclose will be sent if the person has fallen 60 days behind on a payment and owes a total of less than $50,000. The notice will outline specific points, including:
- The total amount of late charges.
- The balance amount due.
- The deadline for payment of the late charges and balance due.
- Details as to why the debtor is in default.
- An explanation of how ownership can be terminated.
- An explanation of your rights to transfer the property.
- A statement that, if the default is not cured, the full balance of the mortgage will be due.
The loan will remain in a pre-foreclosure period until the mortgage default is at least 120 days delinquent. At the end of this notice period, if the debtor has not satisfied the default, the lender must file a complaint with the court stating that the debtor is in default.
If the homeowner does not respond to this action, within 20 days, the loan or service lender will send a 10-day notice to the homeowner. This informs the homeowner that he or she has 10 more days to respond to the complaint before the lender will seek a default judgment. Thus, the homeowner has approximately 33 days to file a response to a foreclosure complaint. A court process will then ensue, and, if the judge rules in favor of the creditor, an order of sale will be permitted so that the creditor can sell the property.
At this time, the debtor will receive a Notice of Sale, which will be:
- Posted on the property at least 30 days prior to sale.
- Served to the parties to this action at least 30 days prior to sale.
Additionally, once a week for three weeks, the scheduled sale will be published in a newspaper. The first publication will not be less than 21 days before the date of sale.
Typically, a home will be placed on the market 60 days following service of the notice of sale. At the foreclosure sale, the property will either be sold to the highest third-party bidder, or it will revert back to the lender and become real-estate owned. It will be a public auction supervised by the county sheriff.
What Are a Homeowner’s Foreclosure Options?
The homeowner may have the option of “reinstatement,” which is when he or she satisfies the amount that is past due in addition to all associated costs and fees. In the state of Pennsylvania, reinstatement may be done up to one hour before bidding begins at the foreclosure sale at a maximum of three times in a calendar year. If a debtor files for Chapter 13 with help from a Philadelphia Chapter 13 attorney, this filing will automatically prevent a foreclosure or sheriff’s sale from going forward. In order to minimize mortgage arrears, filing for Chapter 13 bankruptcy may be the best option for a homeowner who is in default.
If the total mortgage debt is more than the sale price of the property, the difference is called a “deficiency.” Pennsylvania allows the foreclosing party to file a lawsuit within six months of sale to obtain a deficiency judgment against the borrower for the amount owed. The deficiency will be limited by the fair market value of the property if the purchaser at the sale was the foreclosing party.
Philadelphia Foreclosure Defense Attorneys Representing Homeowners
Having your home foreclosed on is a stressful and confusing process, especially when you are not aware of how you can go about saving your home and satisfying debts. However, the Philadelphia mortgage defense lawyers of Sadek and Cooper may be able to help you stop foreclosure with Chapter 13 bankruptcy, which will allow you to satisfy your missed mortgage payments. If you comply with the reorganization plan and stay current with future mortgage payments, you will be able to keep your home.
To speak with a bankruptcy attorney in Philadelphia about stopping foreclosure, call Sadek and Cooper Law Offices, LLC at (215) 995-2543 for a free consultation. We serve the Delaware Valley region.