Januray 4, 2011 Mortgage Foreclosure Sales STAYED

Mortgage Foreclosure Sale and Bankruptcy

It has been ordered by the Philadelphia Court of Common Pleas that all residential mortgage foreclosure sales scheduled for January 11, 2010 be “stayed.”  At this time it is uncertain how long the stay will remain in effect.  The purpose of the temporary stay was to allow time  for a federal relief program to arrive in January, 2011.  This is not the first stay implemented, back in April, 2008 a stay was invoked as well.

Citing “the extraordinary and exigent circumstances surrounding the forthcoming sheriff sale and unprecedented relief that has been established by the federal government,” Judge Dembe ordered the stay and scheduled a hearing on Jan. 13, 2011.

Most of the 1,498 properties listed for sale are residential and could be affected, said Chief Deputy Sheriff Barbara Deeley. The rule will apply only to owner-occupied homes, according to Deeley. Owners will have the burden of proving they live in those homes.   It is estimated that 1,200 of the properties listed will be stayed from sale.

The stay is aimed at compensating for a delay in the start of the new Emergency Homeowners Loan Program, which is to provide bridge loans to homeowners through the U.S. Department of Housing and Urban Development. Pennsylvania is in line to receive $106 million from the program to stave off foreclosures caused by unemployment or a drop in income of 15 percent or more due to underemployment or illness.

 In most cases of mortgage foreclosure, interest and penalties continue to accrue along with taxes and insurance payments.  Generally, it is the mortgage company who ends up footing these bills.  Therefore, the creditor mortgage companies will push for the stay to only last the 30-days ordered.  However, will the 30 days be sufficient for homeowners to apply and receive funds from the Emergency Homeowners Loan Program? That is a big gamble to take with one’s home.  

If there are any general questions or topics you would like to read about relating to bankruptcy law in the Eastern Pennsylvania region, you may contact the Bankruptcy Lawyers at Sadek Law Offices, LLC at 215-545-0008  or 610-432-3111 or email brad@sadek-cooper-site. Thank you.

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