Last year, Pennsylvania was one of the states with the highest foreclosure rates in America. And the sad end result of most foreclosure actions is a Sheriff’s Sale, whereupon the property is sold to the highest bidder.
If you’re one of the thousands of Pennsylvania residents who fears foreclosure, this is what you need to know.
1. They don’t happen overnight.
This is true whether you’re talking about a delinquent mortgage or delinquent tax payments. In both cases there’s an entire process both the lender and the state have to follow before they can simply sell your property or tell you to leave it.
And usually you have a lot of warning before you even start getting the initial notices of intent or complaints. For example, in Philadelphia you have 3 months to pay your property tax without penalty after the initial notice is filed in December. Then you have until January 1st of the following year to pay before anything happens other than the assessment of monthly 1.5% penalties and interest payments.
It’s only after January 1st that the state can start the process of selling your home. And even then they have to send you certified mail advising you of an “upset sale” 30 days prior to the date of the sale.
Your lender moves a little quicker, but they usually let two to four months worth of payments go into arrears before they even send their “Breach Letter” letting you know you’ve violated your loan agreement. They must then serve you with a Notice of Intent which must be hand delivered by the sheriff. You get 30 days to respond after that.
There are many things you can do between the first month you start getting into trouble with your financial obligations and the final foreclosure. You just have to resist the urge to ignore the problem, which many people do simply because they believe they can’t do anything about it.
2. You have (a little) time even after a judgement.
If your lender is the one that’s foreclosing there will be a court case. It’s a good idea to show up, because otherwise the judge will issue a default judgement against you. With a good lawyer by your side you might be able to stop the whole process right here.
30 days prior to the sale the sheriff has to post a notice of sale on your property, and they have to serve you with the notice of the sale. A notice of the sale must also be posted in the paper 21 days prior to the sale.
And if it’s a tax sale? You can stop the sale by making all the payments due, including tax, charges, and interest, or entering into an installment agreement. You can exercise this right at any point during this 30 day period.
See also: What is an Unconscionable Home Loan?
3. Pennsylvania Doesn’t Have a Right of Redemption
In a lender foreclosure, once the property sells, you can’t get it back.
But you can reinstate the property up to one hour before the sheriff’s sale begins. This means you would bring the loan current, including all past due charges, late fees, and costs. You can do this up to three times in a calendar year.
See also: What is an Emergency Bankruptcy Filing?
4. If the property sells, a lender can sue you for the remaining balance.
And unless you have a lot of equity built into the home, the property almost always sells for less than what you owe. Investors scout these sales so they can buy homes cheap.
The lender only has six months to file this lawsuit, but don’t count on slipping through the cracks. There are professionals at these banks who essentially do not have any other job.
5. There are ways to stop the entire process in its tracks.
There are programs in Pennsylvania to help homeowners who are behind on either their mortgages or their taxes; participating in them is one way to stop the process. There are a few foreclosure defense measures we can take on your behalf. And if you file for bankruptcy the automatic stay prevents any sale from moving forward, so long as you file it fast enough.
File the right bankruptcy chapter, and you may even be able to save your home and avoid foreclosure altogether, even if you’re so far behind that you could never catch up in the normal course of things.
See also: Understanding the Automatic Stay.
Are you in danger of losing your home? Don’t wait until it’s too late. Contact the Law Offices of Sadek & Cooper today.