The Mortgage Foreclosure Process in Pennsylvania

In the state of Pennsylvania, if you’ve fallen behind on your mortgage payments, the lender has the right to initiate foreclosure proceedings on your home. Although this recourse may be necessary in some cases, it has serious consequences for delinquent homeowners and should be considered a measure of last resort.

Here’s what Pennsylvania residents need to know about the foreclosure process in their state and what they can do to avoid losing their home.

Countdown to Foreclosure

Foreclosures in PA

Pennsylvania homeowners can find themselves facing foreclosure for a variety of reasons. The most common is missing mortgage payments.

They will be charged late fees based on the terms laid out in the promissory note they signed when they obtained their mortgage. During this pre-foreclosure stage, federal law requires the lender to offer loan modification options. In addition, Pennsylvania law requires a pre-foreclosure notification.

The homeowner is notified of their rights and remedies under the law, including your right to apply to the Pennsylvania Homeowners’ Emergency Mortgage Assistance Program (HEMAP). However, if you abandon the property, the 30-day period does not apply.

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The Pennsylvania Foreclosure Procedure in a Nutshell

Pre-Foreclosure

The homeowner misses several payments. They will be charged late fees based on the terms laid out in the promissory note they signed when they obtained their mortgage. During this pre-foreclosure stage, federal law requires the lender to offer loan modification options. In addition, Pennsylvania law requires a pre-foreclosure notification.

Notice of Intent

Pennsylvania uses a judicial model for foreclosures. This means the lender must file against the homeowner in state court, which initiates the foreclosure procedure. Homeowners are given 20 days to respond. If they do not, the court will enter a default judgment in favor of the lender.

Notice of Sale

Once the court enters a judgment of foreclosure, the lender must post a notice of sale on the premises or serve notice to the homeowner at least 30 days before the scheduled sale. The house can then be sold at a public auction to the highest bidder. Pennsylvania law does allow reinstatement up to one hour before the bidding starts.

Foreclosure Auction

If the bidding proceeds and the lender buys back the property at less than the total amount of the debt owed, they have six months to file a deficiency judgment against the homeowner. That means you can end up owing the lender money after a foreclosure proceeding, though not more than the fair value of the home.

Vacate the Property

Once the house is sold at auction, homeowners must vacate the property or face eviction proceedings.

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Pennsylvania Foreclosure Facts

Foreclosure sales in Pennsylvania must be public and supervised by a county sheriff.

After the notice of intent, homeowners may have a face-to-face meeting with a local consumer credit counseling agency in a final attempt to resolve the delinquency. After this, the lender can begin the foreclosure procedure.

While a lender has the option to allow a grace period after missing a payment, they cannot start foreclosure until 30 days after the missed payment was due.

The state of Pennsylvania has no right of redemption, which would allow a homeowner to reclaim the property post-sale by paying the full sum of the unpaid loan, plus costs.

Foreclosure has a negative impact on your credit score. The higher the original score, the greater the drop in credit and the longer it takes to recover.

Once homeowners are more than 120 days delinquent, federal law allows the lender to start foreclosure proceedings.

Alternatives to Foreclosure in Pennsylvania

Deed in lieu is when you voluntarily hand over the deed to the house to the lender in order to cancel the debt. In this scenario, you still lose your home, but you are proactive with the lender and able to negotiate.

A short sale occurs when you negotiate with the lender to sell a property for less than what you still own on the loan. It is important to note that you still may be held responsible for paying the difference if the lender files a deficiency.

Filing bankruptcy is another way to stop foreclosure proceedings. However, since homeowners have several opportunities to file for loan modification and emergency relief, mortgage foreclosure defense is often preferable to bankruptcy.

If you find yourself behind in mortgage loan or property tax payments, your best option is to avoid defaulting on the loan by taking advantage of the loan modification, remediation, and forbearance options available through Pennsylvania state and federal programs. Being proactive during the pre-foreclosure and foreclosure stages can save your credit and keep you in you

Homeowners in Pennsylvania have the option to sell their property in as is condition to escape foreclosure. This option is considered the quickest and most stress free choice.

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