Guide to the Foreclosure Process in Pennsylvania
Keeping up with mortgage and loan payments is crucial to avoid foreclosure. If you find yourself in the middle of foreclosure proceedings, an attorney can help you through the process and protect your legal interests.
Foreclosure is a legal process by which lenders may seize property or assets if borrowers default on the loan. Although foreclosure is often thought of as a terrible and frightening experience, it takes time to complete, and certain procedures must be followed. First, you should be properly notified of foreclosure proceedings. Next, you must submit an answer to the lender. In some cases, it is possible to cure the default, reinstate the loan, and avoid foreclosure. If this is not the case, foreclosure proceedings may begin, and your property might be sold off to pay for the loan.
If you face foreclosure in Pennsylvania, call our Pennsylvania foreclosure defense lawyers at Young, Marr, Mallis & Associates at (215) 701-6519 for a free case review.
Why Foreclosure Occurs in Pennsylvania
The first thing you should understand in the foreclosure process is why foreclosure happens. If you are a new homeowner, you might have been warned about foreclosure when you mortgaged your house, but the process is somewhat complicated. Our foreclosure defense attorneys can help you fight to keep your home and avoid foreclosure.
Foreclosure and bankruptcy are usually tied up in federal law, although various state laws might apply depending on your case. According to federal law 11 C.F.R. § 1024.41(f), foreclosure can only happen under specific circumstances.
First, perhaps the most widely known reason that foreclosure can occur is if the borrower is late with their monthly payments. Missing one payment is a problem, but it is insufficient to trigger foreclosure proceedings. Under the same federal law mentioned above, foreclosure cannot begin until a borrower is more than 120 days late with a payment. Often, a borrower will be notified of the foreclosure before the 120 deadline, but the foreclosure actually begins after that.
Second, a foreclosure can happen if the borrower violates a due-on-sale clause, also known as an alienation clause. This clause usually requires a borrower to pay the mortgage or loan in full when they sell the property. If you sell the property that secures the mortgage without paying off the full loan, the lender could foreclose the property.
Finally, according to federal law, a lender may initiate foreclosure proceedings if another subordinate or superior lender has filed a foreclosure action to seize the property. This can be a complex process because multiple lenders are involved, and you should contact an attorney immediately.
How the Foreclosure Process Begins in Pennsylvania
The foreclosure process includes several preliminary steps and phases. During this time, our Philadelphia foreclosure defense attorneys can help you figure out what to do in order to protect yourself and whether you can hold on to your home.
One of the very first things to happen during the foreclosure process is the notice. Generally, lenders must notify the borrower of their intent to foreclose. As said before, foreclosure for nonpayment can only occur if a borrower is more than 120 days late with a payment. As such, lenders often send foreclosure notices before the 120-day deadline, and the foreclosure officially commences after.
The notice might be an Act 6 or Act 91 notice. Each notice has the same effect and puts the borrower on notice of foreclosure, but they apply to different kinds of mortgages or loans. Generally, an Act 6 notice applies to people with conventional mortgages or loans, and Act 91 notices are sent to people with Federal Housing Administration loans or U.S. Department of Agriculture Loans.
What Happens After You Have Been Notified of the Foreclosure Process in Pennsylvania
Once you receive the notice, talk to an attorney about submitting your answer. Since many borrowers are notified before foreclosure commences, there might be time to catch up on missed payments or work something out with the lender. Our Bensalem foreclosure defense attorneys can help you answer the notice and hopefully prevent foreclosure.
Once we send your answer, we can begin working on ways to cure the default or otherwise avoid foreclosure. You might have numerous options to choose from, and our foreclosure defense lawyers can assist you.
One possibility in the foreclosure process is to go through mediation with the lender. Mediation allows you to sit down with the lender and try to work out a deal. Foreclosure is not necessarily automatic or required, and the lender might choose to exercise forbearance and hold off on foreclosure proceedings while you cure the default.
Other possibilities include modifying the mortgage or loan agreement to make it easier for you to keep up with payments. If the mortgage cannot be altered, you might want to consider refinancing with a new loan.
What Happens During Foreclosure Proceedings in Pennsylvania?
If the default cannot be cured and time has run out, the lender may move forward with foreclosure proceedings. You might have to go through judicial or nonjudicial foreclosure proceedings, depending on your state. Pennsylvania is a judicial foreclosure state, meaning the process goes through the courts.
In judicial foreclosure proceedings, the foreclosure begins with the lender filing a lawsuit against the borrower. As with any lawsuit, numerous documents, forms, and paperwork must be filed to make sure that the correct parties are involved and that the lender has the standing to sue.
If you believe the foreclosure is happening unlawfully or the lender does not have proper standing, an attorney can help you contest the foreclosure in court. If your case is unsuccessful, your property may be seized by the lender and sold to pay the debt.
Call Our Foreclosure Defense Attorneys for Help
Call our Bucks County foreclosure defense attorneys at Young, Marr, Mallis & Associates at (215) 701-6519 for a free case review about your impending foreclosure.