Philadelphia’s Mortgage Foreclosure Diversion Program
A safe home is vital to the health of individuals and families in Philadelphia, which is why many people seek homeownership as a major personal and financial goal. However, unforeseen circumstances and events can occur, leaving homeowners unable to pay their mortgages. When this happens, the home that they worked hard to be able to buy may be foreclosed upon. Fortunately, Philadelphia offers mortgage foreclosure programs that allow homeowners facing the possibility of foreclosure to mitigate their losses and protect themselves from unfair lending practices.
An attorney can assist Philadelphia homeowners facing the threat of foreclosure through participation in foreclosure diversion programs and other actions. The Philadelphia mortgage foreclosure attorneys that work with Young Marr & Associates use their skills and experience to help homeowners across the city. Get in touch with Young Marr & Associates to learn more about your options for preventing home foreclosure or to schedule a free and confidential consultation. Call (215) 701-6519 today.
Philadelphia Mortgage Foreclosure Diversion Program Conciliation Conference
Philadelphia’s Mortgage Foreclosure Prevention Program is intended to help families that are seeking a solution to the possibility of losing their home to foreclosure. This program is available to homeowners in Philadelphia who have properties that are involved in the mortgage foreclosure process, as long as the property is occupied and serving as the homeowner’s primary residence. This program offers free legal advice and housing counseling to homeowners facing the possibility of foreclosure.
One of the main features of the mortgage foreclosure diversion program is the conciliation conference. At this conference, the homeowner and a housing counselor will have a chance to meet with the homeowner’s lender. Before homeowners can participate in a conciliation conference, homeowners should contact Philadelphia’s Foreclosure Prevention Program, assemble their financial documents, and meet with a housing counselor. Conciliation conferences are scheduled by the court.
During the conciliation conference, the homeowner will need to bring the following documents:
- Verification of income for all members of the household, including federal tax returns or W2s; two months’ pay stubs; and proof of non-work income such as child support, alimony, or Social Security
- Documentation of current household expenses, which includes the homeowner’s two most recent bank statements, copies of recurring bills, and evidence of other major expenses such as car payments, credit card statements, health insurance, tuition
- Copies of foreclosure notices, court notices, and sheriff’s sale notices that the homeowner received
- Copes of loan documents for all loans on the home, including the first mortgage, the home equity loan, and the second mortgage if applicable
- Other documents that may apply, including current agreements with the lender, proof of expected income, and letters describing hardship that has led to financial problems, such as divorce or temporary job loss
How to Prevent Foreclosure on Your Home
During the conciliation conference, the homeowner facing foreclosure and the lender will discuss possible alternatives to foreclosure. Possible options that may be good alternatives to foreclosure include:
- Mortgage modification – Mortgage borrowers may work with lenders to negotiate the terms of the loan so that it is more feasible for the borrower to pay back the loan. The terms of the loan – including the payment period, interest rate, or the amount of principal that is owed – may be adjusted to better suit the financial capabilities of the homeowner. It is also possible for homeowners to switch from a variable interest rate to a fixed interest rate during a mortgage modification or be able to postpone their payments.
- Forbearance agreement – When a mortgage borrower and lender enter into a forbearance agreement, the borrower is given a period of time, usually six months, to create and implement a long-term plan. At the end of the forbearance period, the homeowner will have to pay the amount that they did not pay during the forbearance period, either in the form of a lump sum or as an addition to their regular monthly payments.
- Short sale – During a short sale, the lender lets the homeowner sell their home for less than it is worth. The forgiven debt will be treated as taxable income by the IRS. During a short sale, the home will be sold on the same market as all other homes. However, homeowners considering this option should note that it is often harder to sell a home through this type of sale because buyers often have reservations. (In addition to a lawyer, homeowners that would like to conduct a short sale should also hire a realtor.)
- Bankruptcy – For some mortgage borrowers, declaring bankruptcy may be the best option. Borrowers can declare either Chapter 13 or Chapter 7 bankruptcy. With Chapter 13 bankruptcy, borrowers can catch up on the mortgage payments that they’ve missed by creating a plan to repay their past-due payments. Chapter 7 bankruptcy, on the other hand, does not give borrowers time to catch up on their payments. Chapter 7 bankruptcy can temporarily postpone foreclosure proceedings, however, which may give some borrowers time to catch up on their mortgage.
Mortgage Foreclosure Defense Attorneys Available in Philadelphia
Losing your home to foreclosure can be catastrophic to the future of you and your family. Take action now to prevent looming foreclosure from affecting your life. Contact the Philadelphia foreclosure defense attorneys at Young Marr & Associates to learn more about how you can use their skills to avoid foreclosure. Call (215) 701-6519 today.