Foreclosure is a legal process when a mortgage lender (usually banks) aims to take possession and to sell a home at auction when the borrower has defaulted on the loan. The foreclosure process in Pennsylvania starts after a lender files a “Notice of Default”. In most cases, that happens after a homeowner is a few months behind on mortgage payments.
There are two types of foreclosure process:
- Judicial
- Non-judicial
Judicial foreclosure means that all foreclosure process goes through the court. Usually, Judicial sale is more beneficial for a homeowner because it gives more legal options to fight or avoid foreclosure.
Non-judicial foreclosure means that a lender has the legal right to force a home sale without court approval.
Most foreclosures in Pennlyvaninia, Delaware, and New Jersey are a judicial type of foreclosures.
What can cause a foreclosure?
The primary reason why homes are foreclosed is that homeowners can no longer pay the mortgage. There are many reasons why homeowners are not able to keep with their payments:
- unexpected medical bills
- job loss
- death of a family member
- or adjustable-rate mortgage makes your payments unbearable.
If you feel, that foreclosure is inevitable for you:
- do not panic
- do not fear
As a team of StopTheSheriff, we want to tell you that hundreds of thousands of people go through foreclosure every year, and there are many positive cases where people were able to stop foreclosure or sell property avoiding harmful consequences of foreclosure.
How does foreclosure work
Step 1: Pre-foreclosure
- Defaulting on your mortgage. The borrower missed a few monthly payments. Under federal law, the court cannot formally start a foreclosure process until the homeowner is behind four months (120 days) of mortgage payments.
- A Demand Letter. The lender sends to the borrower a demand letter notifying the borrower that loan is in default. On this stage, your best options to stop a lender from proceeding with a foreclosing process would be catching up on missed payments or contact lender for loan modification programs.
- Notice of Intent to foreclosure. A lender is obligated to send the borrower a notice of intent to foreclose 30 days before filing a foreclosure suit.
Step 2. Foreclosure
On this stage, you need to act fast to prevent foreclosure or make most of the situation in your favor.
- Filing a foreclosure suit. After a lender files a foreclosure lawsuit, the foreclosure officially begins. A borrower typically has about 15 days to respond to the foreclosure complaint.
- A court approves foreclosure.
- Notice of Sale. Law requires a lender to send a “notice of sale” which declares a lender intends to sell the property at auction. A lender is obligated to send “notice of sale” before 30 days of a foreclosure auction. Also, he is required to advertise publicly “notice of sale” in a local newspaper. In Philadelphia, Legal Intelligencer publish once in a month all
Step 3. The auction
- The auction. In Philadelphia, all foreclosure auctions are held at First District Plaza, 3801 Market St, Philadelphia, PA 19104.
- Redemption period. Some states have a redemption period that allows the owner to take back the property after it has been sold at auction.
Step 4. Foreclosure eviction
Once a new owner obtains a property title, he will start an eviction process. An eviction process in Philadelphia might take up to 10 months and severely affect your credit history. Being forced to leave your house thought the eviction process is the worst scenario for a homeowner to handle foreclosure.
