A Guide to the Foreclosure Process in PA

Facing foreclosure can be an overwhelming experience. Having a greater understanding of how the foreclosure process works in Pennsylvania allows you to navigate it more effectively. The foreclosure process involves numerous legal steps designed to protect both homeowners and lenders. For this reason, it’s best not to navigate the process alone. An experienced PA bankruptcy attorney can help you every step of the way.

Notice of Intention to Foreclose

Pennsylvania’s foreclosure process begins with a required notice of intention to foreclose. This notice serves a warning and provides homeowners with the opportunity to take corrective action and avoid foreclosure. There are two types of notices typically issued in Pennsylvania: Act 91 Notice and Act 6 Notice.

Act 91 Notice

Act 91 Notices are by mortgage lenders to homeowners of residential properties that are facing foreclosure. This often results from defaulting on one’s loan mortgage or failing to meet payments for a duration of time. Lenders can issue the notice when Pennsylvania borrowers have been delinquent on their loan for 120 days minimum.

If you have already filed for bankruptcy, the Act 91 Notice is provided for informational purposes only, not as an attempt to collect debt. When filing for bankruptcy, an automatic stay will come into effect for the duration of the bankruptcy case.

Act 6 Notice

Act 6 Notice is sent after three months of missed payments. This must be sent to a residential mortgage lender at least 30 days before filing a foreclosure claim. Amount due as well as any delinquent payments, fees, or costs are outlined in the Act 6 Notice.

Foreclosure Diversion Programs

Some Pennsylvania counties offer foreclosure diversion programs, in which homeowners have the opportunity to negotiate repayment plans or loan modifications. These programs often involve mediation sessions between the homeowner and the lender to explore alternatives to foreclosure. When consulting with your attorney, ask whether foreclosure diversion programs could help you and if they are offered within your county.

Foreclosure Sale

Once the court issues a judgement on foreclosure in favor of the lender, a sheriff sale will be scheduled. This is a public auction, in which the property is sold by the sheriff to pay back those who have a money judgment or foreclosure judgment. Notice of sheriff sales are issued before a sale and posted on the premises. If you have received a notice informing you of a sheriff sale, there may still be time to protect your assets. However, you will need to consult with your attorney as soon as possible to assess your options and take action.

Eviction

If the property is sold at a sheriff’s sale, the new owner can move forward with the eviction process (technically called an “ejectment”) to remove occupants still at the property. Homeowners typically receive a notice to vacate the property.  Compliance is required, or the new owner can file for an ejectment action through the court.

How Long Does the Foreclosure Process Take?

The foreclosure process in Pennsylvania varies in length. Generally, this process takes several months to over a year, due to a wide variety of factors. Court backlogs, homeowner responses, and attempts to negotiate alternatives are all factors influencing the time it takes to foreclose. In addition, lenders cannot send foreclosure notices until a certain time frame has passed in which there were delinquent payments. For example, Act 6 Notice cannot be sent until at least three months of missed payments have occurred. At the first warning signs of the foreclosure process, seek legal representation as soon as possible to weigh your options and protect your property.

How to Stop a Foreclosure

Stopping a foreclosure may be possible under certain circumstances.  Working with your lender to adjust the terms of your mortgage can help avoid the foreclosure process before it begins. Refinancing also offers another option, if you are able to obtain a new loan that helps pay off the defaulted mortgage.  However, refinancing the loan can be difficult once payments are missed due to its impact on your credit.

If you find yourself facing the foreclosure process, filing for bankruptcy may be the best option, as it can temporarily halt the foreclosure process through an automatic bankruptcy stay. For this, you will need the help of your attorney to walk you through the bankruptcy filing process. For the duration of the bankruptcy case, lenders will be unable to move forward with the foreclosure process as you slowly repay the amount that is overdue.