 Pennsylvania Loan Modification Guidelines
When you develop a definite plan of action with well-timed, well-informed
steps, you can stop the foreclosure process and save your home. We have
outlined the foreclosure process for the state of Pennsylvania .
The Process
Pennsylvania's judicial foreclosure is not easy for lenders. All actions
to foreclose, accelerate or take possession are stayed until the borrower
is sent an "Act 91" notice giving the borrower 30 days to meet
the lender or a consumer credit agency listed on the notice.
Starting from the day of the first meeting, the borrower has another 30
days delay to try and resolve the problem by restructuring loan payments.
Otherwise, the borrower can apply for a Homeowner's Emergency Mortgage
Assistance Program Loan and gain an extra 60-day delay on foreclosure to
process the application. If the borrower has had good residential credit
for the past 5 years, is 60 days delinquent and has a reasonable prospect
of resuming loan payments in full within 36 months, then the borrower should
be approved. If the loan is disapproved, or no meetings took place after
the first 30 days, the lender may foreclose.
Reimbursement
Under "Act 6," which applies to home loans under $50,000, the
borrower must be sent a 30-day notice of the foreclosure, during which
time attorney's fees are limited to $50. Also, the borrower may pay the
past due payments and stop the foreclosure up to one hour before the bidding
at the sheriff's sale and may do this up to three times in a calendar year.
The Foreclosure Lawsuit
The foreclosure complaint (lawsuit) must be filed and served on the borrower.
It must describe the property to be foreclosed on. It must state the names
of the borrower and the lender, the itemized amounts due, the fact that
the mortgage is in default and a demand for judgment. Although the lender
may state more than one reason to foreclose, the lender may not sue to
collect the money owed on the loan in addition to the suit to force the
sale of the property by foreclosure. The defendant may file a counterclaim
against the lender. The lawsuit however, must be tried before a judge,
without a jury. If the court orders foreclosure, then at least 30 days
before foreclosure the sheriff must give notice by putting a handbill on
the property, serving a copy on the borrower and advertising the property
for sale for three consecutive weeks. The sale takes place a month or two
after the court's order.
Redemption
There is no right of redemption after the sale.
Deficiency
Pennsylvania passed the Pennsylvania Deficiency Judgment Act. The lender
may file a lawsuit to collect on the promissory note signed by the borrower
within six months of foreclosure. This lawsuit must be separate from the
foreclosure lawsuit. The borrower has the right to force the lender to
credit the fair market value of the property sold at the foreclosure sale
against what is owed on the note. The suit must be filed within six months
after the foreclosure.
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