Differences Between Foreclosure and a Sheriff’s Sale in PA

When your property is being sold off to satisfy creditors, you should receive a notice for foreclosure and a sheriff’s sale. While these processes are related, there are differences between them that can seriously impact your case.

If you are behind on your payments and your creditor has filed suit against you, you are facing foreclosure. This is only the beginning of losing your property, though, as the sheriff’s sale acts as the mechanism to sell it to another party. Fortunately, our team can help you develop a strategy that can stop this, regardless of which stage of the process you are in. After reviewing your case, we will better understand your financial situation and the options that makes available. Even if you decide you want to sell the property, we can help so that the sale satisfies your debts.

Contact Young, Marr, Mallis & Associates at (215) 701-6519 for a free case review with our Pennsylvania bankruptcy attorneys.

What Are the Main Differences Between Foreclosures and Sheriff’s Sales in Pennsylvania?

In Pennsylvania, the processes of foreclosure and sheriff’s sales are intertwined yet distinct, each playing its role in how properties with unpaid mortgages or taxes are dealt with. Fortunately, our Pennsylvania property lawyers can help explain the distinctions and how to address each situation. A foreclosure will be the first part of the process initiated by the lender, like a bank or mortgage company, when a homeowner fails to make mortgage payments.

Through foreclosure proceedings, the lender can attempt to recover the balance of a loan from the homeowner who has stopped making payments. To foreclose on a home, though, a lender must file a complaint in the Court of Common Pleas and obtain a judgment against the homeowner.

A sheriff’s sale, on the other hand, is the culmination of the foreclosure process, where the property is auctioned to the highest bidder. It is a means by which the foreclosing entity, whether it be a bank, tax authority, or homeowners’ association (HOA), regains title to the property and auctions it off to satisfy the outstanding debts.

How Can I Contest a Foreclosure in Pennsylvania?

You can contest a foreclosure in a number of ways. In every case, homeowners have the right to respond to the foreclosure complaint by filing an answer with the court.

This response can challenge the foreclosure on various grounds, such as errors in the mortgage or servicing process, lack of standing by the lender, or violations of state and federal mortgage laws. By filing an answer, you move the case into the litigation process, potentially leading to a more favorable outcome for you and your family.

Arranging to catch up on missed payments through loan modification or forbearance could also prevent foreclosure. However, this option typically requires skillful negotiation with the lender but can provide a viable path to keeping your home.

Some Pennsylvania counties also offer pre-foreclosure mediation programs designed to help homeowners and lenders find alternatives to foreclosure. Participation in these programs can delay the proceedings and often lead to a modified loan agreement or another solution that allows you to avoid foreclosure.

However, if you lose in a pre-foreclosure mediation or initial hearing, you usually have the right to appeal to a higher court. While challenging, this route allows homeowners to halt the foreclosure decision, at least until additional evidence and arguments are presented to overturn the original decision.

Lastly, thoroughly reviewing the foreclosure documentation and overall process can reveal errors or legal violations that could serve as a basis for contesting the foreclosure. These might include mistakes in the loan balance, misapplied payments, or the lender’s failure to follow Pennsylvania’s foreclosure procedures correctly.

How Can I Contest a Sheriff’s Sale in Pennsylvania?

The fact that you have gone through foreclosure and moved on to a sheriff’s sale does not mean your options to contest the sale of your property have entirely run out. Gross inadequacy of price can be argued as a valid reason to set aside a sheriff’s sale. While a low sale price alone might not suffice, significantly low prices that shock the conscience of the court might warrant invalidating the sale.

Challenges can also be based on a lack of authority to sell the property or fraud in the conduct of the sale. Homeowners can generally contest a sale if it was conducted without proper authority or if fraudulent practices were involved at any point in the process.

Another good strategy to stop a sheriff’s sale is to file for bankruptcy. In most cases, filing for bankruptcy triggers an automatic stay that forbids any further collection actions, including sheriff’s sales. However, this option hinges on your filing being approved by the court, which usually means showing your ability to make your payments or plan to make payments over time.

We can also help you file a motion to set aside a sheriff’s sale for proper cause. This usually requires demonstrating to the court a significant violation of your rights, such as procedural errors or gross mistakes that justify setting aside the sale.

Alternatively, petitions to postpone a sheriff’s sale can be filed up until the day before the sale, providing a short-term reprieve to address the underlying issues causing the sale. However, it is best to file these petitions at least a week in advance so your petition has a chance to be heard.

How Can a Pennsylvania Property Attorney Help a Foreclosure or Sheriff’s Sale Case?

With so much on the line in these types of proceedings, it is hard to overstate the importance of having a knowledgeable attorney on your side. One of the key services our team provides is negotiating with lenders on behalf of our clients. This usually involves seeking a compromise through a loan modification, forbearance agreement, or other arrangements that allow you to retain possession of the property while addressing the underlying debts.

Should a foreclosure or sheriff’s sale case proceed to court, we will be ready to present evidence and fight for your rights. However, this typically entails gathering and organizing a great deal of evidence. Fortunately, we know what to look for, so your filing is complete.

The documents you will need include the original mortgage or deed of trust, promissory note, and any modification agreements you made. We can also account for and make detailed records of the total mortgage payments you made. These records should also show dates, amounts, and methods of payment. In some cases, this can expose discrepancies in the lender’s claims.

Lastly, our team will compile all communication between you and the lender or servicer, including letters, emails, and any notices related to the mortgage. Letters and emails discussing payment difficulties, foreclosure avoidance options, or loan modification requests are especially important.

Our Pennsylvania Property Lawyers Can Help Whether You Are Facing Foreclosure or a Sheriff’s Sale

For a free case analysis with our Pennsylvania property lawyers, call Young, Marr, Mallis & Associates at (215) 701-6519.