Mortgage Foreclosure Lawyers in Philadelphia

What is the Process for a Mortgage Foreclosure in Pennsylvania?

Defining Mortgage Foreclosure

Foreclosure is a legal process that your lender must go through to enforce its rights. 

For example, mortgage lenders can force the sale of a person’s home to collect the outstanding debt from missed or partial mortgage payments. When a homeowner signs the mortgage agreement, he or she will sign a mortgage or deed of trust. In the deed of trust, the homeowner gives the mortgage lender a security interest in the house. In exchange for issuing the loan, the homeowner guarantees to repay the mortgage. 

When the homeowner stops paying the mortgage, the mortgage lender can sell the house without consent and recoup the money.

The Judicial Mortgage Foreclosure Process

In Pennsylvania, the mortgage lender must send the homeowner a notice of intent to foreclose before beginning any foreclosure proceedings. In Pennsylvania, we call this notice requirement the Act 91 Notice. The lender must send the Act 91 Notice by first-class mail to the borrower. In addition, they need to send it to their last address or the property secured by the mortgage. 

How Many Missed Payments Before Mortgage Foreclosure in Philadelphia and PA?

In Pennsylvania, missing one mortgage payment is enough for the landlord to initiate foreclosure. However, according to the Act 91 Notice requirements, lenders must wait until the borrower is at least 60 days behind in his or her mortgage payments. Then, the mortgage lender must tell the borrower that the mortgage is in default and that they intend to accelerate the mortgage payments if the borrower does not cure the defaulted amount within 30 days. At this point, the remaining balance of the mortgage becomes due immediately. 

As a result, the homeowner will have at least 90 days from missing their first mortgage payment before the foreclosure process begins. If you have received an Act 91 Notice, it is essential to speak to a foreclosure lawyer as soon as possible. You will have 30 days to bring your mortgage up to date by paying off the amount you owe. Your lawyer can help you develop a strategy for delaying the foreclosure or even stopping it altogether.

The Sheriff’s Foreclosure Sale

If the borrower does not pay the full past due amount plus any late charges within 30 days, the lender has a right to file a suit to obtain a court order to foreclose the home. Should the court rule in favor of the lender, it will issue an order of sale, and the property will go up for sale at a sheriff’s sale. The borrower can try to cure the default and stop the sale at any time up to one hour before the sheriff’s foreclosure sale.

The Mortgage Foreclosure Complaint

After the 30-day notice, the mortgage lender must file a mortgage foreclosure complaint in the county where the property is located. Then, the lender must serve the complaint (give it to you) again. At this point in the process, you will only have a limited amount of time to answer. If you do not file an answer, the court will determine that the complaint is uncontested, and the lender will be able to obtain a default mortgage foreclosure. Once this happens, the sheriff will send the judgment, and your property will be listed at auction. You must file an answer if you would like to stay in your home. The lawyers at the Law Offices of Cibik Law can help you develop an effective defensive strategy.

How Does a Reverse Mortgage Foreclosure Work?

In a reverse mortgage, homeowners over 62 use the equity in their homes to receive monthly cash payments. In a reverse mortgage foreclosure, the lender requires full repayment of a reverse mortgage loan balance because of some type of triggering event. The triggering event is typically the death of the homeowners. Other circumstances leading to a reverse mortgage foreclosure could involve one owner dying and the surviving spouse not being on the reverse mortgage loan, or the property being transferred or sold.

How Can I Stop a Mortgage Foreclosure and Sheriff’s Sale of My Home?

Going through a foreclosure is a stressful experience. However, with the help of an experienced foreclosure lawyer, you can try to stave off the foreclosure of your home. 

There are five key strategies you can use to avoid losing your property.

1) File Chapter 13 or Chapter 7

Filing bankruptcy automatically stops most creditor actions against your property, including foreclosure and sheriff’s sales. As long as the stay remains in effect, the foreclosure cannot be continued.

The lender can unlock the stay with court permission, but acquiring this permission normally requires over 60 days. The lender can also choose not to act, delaying the foreclosure until the Chapter 7 bankruptcy case concludes.

A Chapter 13 bankruptcy allows you to place a permanent halt on foreclosure proceedings. As a part of the agreement, the lender will accept payment by installments, rather than a lump sum for all past-due payments. These installment payments can last anywhere from 36 to 60 months.

2) Reinstate your mortgage

You can try to reinstate your mortgage by getting current on your payments. Be sure to find out precisely how much money you need to get to the lender, and when the due date is for that amount. If your home is actively in foreclosure, there may also be late fees that go along with the missed payments.

3) Qualify for Federal Program

You may be able to qualify for a federal program called the Making Home Affordable Program, a program launched in 2009 as part of the Troubled Asset Relief Program, the federal government’s response to the subprime mortgage crisis. The aim of the program is to aid eligible homeowners by lowering their monthly mortgage payments to more manageable levels. 

Private lenders have even begun to set up new processes to look at homeowners who might have previously gone unassisted.

4) Work out a deal with the lender

Many lenders have options for internal programs, ranging from mortgage modifications similar to many federal programs to repayment plans on mortgage delinquencies. 

Most lenders will consider federal programs first (assuming they participate), and then search for internal programs if the federal programs do not fit.

5) Sell your home

Not everyone in foreclosure wishes to stay in their home. Selling your home yourself may be worth considering, especially if it has equity. Talk to your local HUD certified housing counselor and find out when selling is officially no longer an option.

Common Questions About Mortgage Foreclosures, Sheriff’s Sales, & Home Auctions

Will the current foreclosure moratorium in 2021 be extended?

As of May 10th 2021, the foreclosure moratorium extension will be in effect through June 30, 2021. 

Additionally, as of June 3rd 2021, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac will continue offering COVID-19 forbearance to qualifying multifamily property owners through September 30, 2021, subject to the continued tenant protections the FHFA has imposed during the pandemic. 

How can I stop a second mortgage foreclosure?

There are three ways to stop or forestall a second mortgage foreclosure:

• Secure a home equity loan
• Stop the proceedings by settling the balance or filing bankruptcy
• If the primary forecloses, the junior lien holders can take the leftover proceeds, or sue if there is not enough equity

What is the timeline for a reverse mortgage foreclosure?

By law, you have 30 days to respond to the notice demonstrating your intentions for the property. You will then have six months to either repay the reverse mortgage debt or purchase the home for 95% of its current appraised value. You can then pay back the debt by selling the house or using other funds.

What are my responsibilities and options if I’m the heir to a reverse mortgage? 

Under an HECM, those who inherit a house subject to a reverse mortgage have four options:

• Repay the loan. With an HECM, the heirs can choose to repay 95% of the appraised value themselves and keep the home. FHA insurance will then cover the remaining loan balance.
• Sell the home and use the proceeds to pay back the reverse mortgage. With an HECM, heirs can sell the property for the full amount of debt owed on the loan or an amount that is at least 95% of the property’s current appraised value.
• Deed the home to the lender.
• Do nothing and let the lender foreclose.

How do Philadelphia sheriff sales work?

A sheriff sale is a public auction of a property, such as a home or other building, when the property has unpaid debts associated with it. This debt comes from former or current owners, and any buyer would be responsible for paying the debt upon gaining title to the property. 

Because sheriff sales take place to raise money for unpaid debt, the sale proceeds are applied to these municipal liens. Applying the proceeds clears all liens from the property, even if the proceeds do not cover the liens entirely. Therefore, buyers of property through sheriff sale are able to gain title unburdened by debts or liens.

If your home is currently at risk of being put up for sheriff sale, please call Cibik Law today for help.

How many times can a sheriff’s sale be postponed in Pennsylvania?

Sheriff sales can be postponed twice within 130 days of the original sale date. The property typically will not be re-advertised in the newspaper. Announcements are made at the beginning of each sale indicating those properties that have been continued or stayed.

What happens after sheriff sale in PA?

Under limited circumstances, you can challenge the sheriff sale by filing a motion to set aside the sale before transfer of the deed to the buyer. Otherwise, the deed is transferred after 21 days in the State of Pennsylvania.

Can a sheriff’s sale be reversed?

In Pennsylvania, a homeowner does not have the right of redemption once a home is sold at a mortgage foreclosure sale. In some very rare cases, a sheriff sale can be reversed if it was sold at a tax-debt sale.

How late can my mortgage be before foreclosure? 

Generally, mortgage payments must be delinquent for at least 120 days before foreclosure motions can begin. There are also notices that must be given before the mortgage foreclosure process can begin, so it is important to stay alert to any notices or letters of demands. If the foreclosing party fails to comply with federal and state guidelines for notice of foreclosure, our attorneys may be able to temporarily stay your foreclosure.

Do I owe money if my house is foreclosed? 

Mortgage foreclosure is usually a tool to pay off your debts. If your debts total more than the cost of your mortgage, however, you may still owe money to lenders. 

Can I get a foreclosure removed from my credit report? 

A foreclosure will remain on your credit report for seven years. It must be removed after seven years to the day of your first late payment, called the date of first delinquency. 

How long after a foreclosure can I buy a house? 

This question depends on your financial situation and credit score. Some lenders do have minimum waiting periods before you can apply for a mortgage loan after a mortgage foreclosure, however. For example, there is a three year waiting period for FHA loans, a two year waiting period for VA loans, and a seven year waiting period for Fannie Mae loans. 

How do I rebuild credit after a foreclosure? 

There are plenty of ways to rebuild credit after a foreclosure. The best advice is to create a budget and stick to it, while paying off any bills or debts on time. Rebuilding a poor credit score can take time, but it is not impossible to get back in good standing. You may also consider seeking professional help, like credit counseling. 

Can foreclosure be stopped? 

Yes, foreclosures can be stopped through various methods, even if you are struggling with your finances. Bankruptcy attorney Michael A. Cibik has helped individuals and families across the Philadelphia area for over 20 years to avoid foreclosure and reorganize their debts. Contact us for a free, no obligation consultation to discuss your mortgage debt. Our attorneys will provide as much information as possible to help you make the best decision to keep your home and find debt relief.