A sheriff’s sale can sell your Philadelphia, Pennsylvania home after a court-ordered judgment is entered against you for failure to submit mortgage and or tax payments. Foreclosure rates are spiking across the state, hitting hard. But here’s the secret: you can stop foreclosure in Pennsylvania!
In Pennsylvania, homeowners have options to fight back and protect their homes. A low-cost bankruptcy lawyer in Pennsylvania can help you.
In this blog, we’ll uncover simple, proven legal strategies for quickly halting foreclosure and securing your home.
Understanding Foreclosure in Pennsylvania
The foreclosure process begins after you miss three (3) mortgage payments. The banks can sell your home through a Sheriff’s Sale after a judgment is entered against you. In Pennsylvania, the court process is slower than in some states.
The bank sends a “Notice of Intent to Foreclose” after three missed payments, giving you 30 days to respond. If you don’t, your home can be sold at sheriff’s sale after a court ordered judgment is entered against you.
If you act quickly, there are legal ways to stop foreclosure in Pennsylvania and protect your home.
What’s different? Counties like Philadelphia first require a meeting with the bank. It’s a chance to work things out.
Reinstating the Loan
Reinstating your loan can stop foreclosure in Pennsylvania, even just one hour before the sheriff’s sale. You pay all missed payments, late fees, and extra costs—not the whole mortgage. It’s a big help if you can get money fast, like from savings or family.
Here’s what to know:
Banks set tough deadlines to reinstate.
They won’t take partial payments.
You need proof of cash.
According to state records, in 2022, about 15% of Pennsylvania foreclosure cases used reinstatement. It’s not easy, but it works. Act quickly and talk to an expert to get it right. This buys you time to fix your money troubles.
Loan Modification and Forbearance Agreements
Loan modification or forbearance agreements can help you keep your Pennsylvania home. These steps make paying your mortgage easier and stop foreclosure in Pennsylvania.
- Loan Modification: This changes your mortgage terms forever. It lowers your monthly payment by reducing the interest rate or stretching out the loan time. You need to prove tough times, like a job loss or big bills, to convince the bank. It’s great if money problems won’t go away soon.
- Forbearance: This cuts or stops payments for a little while, maybe a few months, if you’re sick or out of work. You’ll pay again later, so save up.
Filing for Bankruptcy
Chapter 13 Bankruptcy: This stops foreclosure right away with an automatic stay. A Chapter 13 court approved Plan spanning 3 to 5 years is available, to those who qualify, to provide you with time to catch up on missed mortgage or tax payments. You can keep your home and discharge or pay other debts as well.
Chapter 7 Bankruptcy: Generally, this only delays foreclosure with an automatic stay but doesn’t save your home from a foreclosure sale. However, you may file a Chapter 7 bankruptcy if you own a home, discharge eligible debts, and keep your home if: (1) your mortgage is current; AND (2) you have no equity in the home after exemptions.
Utilizing Pennsylvania’s Homeowners’ Emergency Mortgage Assistance Program (HEMAP)
Pennsylvania’s HEMAP is a program to help homeowners avoid foreclosure. It’s run by the Pennsylvania Housing Finance Agency (PHFA) and supports people facing money issues.
Who Can Use It and What You Get: You need to show a financial hardship, like job loss or illness. You must also prove you can pay your mortgage again later. Your income has to be below certain limits. It depends on your family size. HEMAP provides a loan or grant to cover late mortgage payments if you qualify.
How to Apply and What It Does: You have to submit an application with details about your income, like pay stubs, and explain your hardship. If accepted, HEMAP pays your overdue mortgage amounts to the lender. It can also assist with payments for up to 24 months.
Short Sale and Deed Instead of Foreclosure
If you can’t save your home, a short sale or deed in lieu can cut your losses.
Short Sale: You sell your house for less than the value of the mortgage. The bank has to approve it. You need to show that your home’s value is lower than the debt.
Deed in Lieu: You give the house to the bank to wipe out the mortgage debt. It’s simple, but the bank must say yes. You can’t have other loans on the house, like a second mortgage.
Time to Act: Save Your Home Now
Foreclosure doesn’t have to win in Pennsylvania. Legal options exist to lighten your load and keep your house.
Reach out to a lawyer or counselor now to figure out your next move. Bankruptcy could be the fix you need.
What’s your plan to stay in your home—will you look into bankruptcy or risk it all?