If you’re behind in your mortgage payments and facing foreclosure in Pennsylvania, you should learn as much as you can about the state’s foreclosure laws. In this article, you can find out about:
You’ll also get information about significant protections for homeowners under federal law, like the 120-day preforeclosure period.
Under federal law, in most cases, a loan servicer must wait until you're over 120 days' delinquent before officially starting the foreclosure process. (12 C.F.R. § 1024.41). This preforeclosure period is an excellent time to submit an application to your servicer asking for an alternative to foreclosure. You might be able to stay in your home by working out a repayment plan or modification, for example, or give it up without going through a foreclosure in a short sale or deed in lieu of foreclosure.
Federal law also provides other protections to homeowners facing a foreclosure, like the following:
Pennsylvania law requires the following preforeclosure notices.
The foreclosing bank has to send the borrower a notice of its intent to foreclose at least 30 days before starting a foreclosure. The notice must give the borrower the chance to catch up on the payments (called “curing the default”). This notice isn’t required under certain circumstances, like if you abandon the home. (41 Pa. Stat. Ann. § 403).
At least 30 days before foreclosing, the foreclosing party must usually give the borrower notice about qualifying for financial assistance under Pennsylvania’s Homeowner's Emergency Mortgage Assistance Program. The borrower must be at least 60 days delinquent on the mortgage payments before the notice is sent. (35 Pa. Stat. Ann. § 1680.403c).
The notice must also give 30 days, plus three days to account for mailing time, to have a face-to-face meeting with a local consumer credit counseling agency to try to resolve the default. (35 Pa. Stat. Ann. § 1680.403c).
The foreclosing party doesn’t have to send the notice if the borrower is in default for more than 24 months, owes over $60,000, or the assistance program runs out of funds. The notice is also not required if the foreclosing party previously gave the notice and the borrower:
Foreclosures in Pennsylvania are judicial, which means the foreclosing bank must sue the borrower in court in order to foreclose the property. The bank files a lawsuit in court to start the foreclosure and gives notice of the suit by serving the borrower with a summons and complaint.
If the court grants a judgment in favor of the foreclosing party, the property will be sold to satisfy the mortgage debt. A notice of sale must be posted on the property, as well as the sheriff's office, and served to the borrower at least 30 days before the sale. It must also be published in a newspaper once a week for three weeks. (Pennsylvania Rule of Civil Procedure 3129.2).
“Reinstating” is when the borrower catches up on the defaulted mortgage's missed payments, plus fees and costs, to stop a foreclosure sale from happening.
Pennsylvania law allows reinstatement at any time at least one hour prior to when bidding starts at the foreclosure sale, a maximum of three times in any calendar year. (41 Pa. Stat. Ann. § 404). Your mortgage contract might also give you the right to reinstate.
Some states allow the borrower to redeem the home within a specific period after a foreclosure. Pennsylvania law, however, doesn’t provide a borrower with the right to redeem the property after the foreclosure sale.
Pennsylvania doesn’t offer a statewide foreclosure mediation program, but some counties have implemented foreclosure diversion (or conciliation) programs that might help you avoid foreclosure. (To learn more about these programs, see Nolo’s article Pennsylvania’s County Foreclosure Diversion Programs or check your county's official website.)
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a deficiency. Some states allow the bank to seek a personal judgment—called a deficiency judgment—against the borrower for this amount. Other states prohibit deficiency judgments with anti-deficiency laws.
In Pennsylvania, the foreclosing party may obtain a deficiency judgment by filing a separate lawsuit within six months after the foreclosure sale. If the foreclosing party was the purchaser at the foreclosure sale, the deficiency is limited by the fair market value of the property. (42 Pa. Cons. Stat. Ann. §§ 8103(a), 5522(b)(2)).
This article contains citations to Pennsylvania’s foreclosure laws so you can read the statutes yourself. Keep in mind that statutes change, so checking them is always a good idea. (If you need help finding the statutes, see Finding Your State’s Foreclosure Laws.) How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consider consulting a lawyer if you’re facing a foreclosure.
You should also consider talking to a lawyer if you want to get more information about foreclosure procedures in Pennsylvania or find out about potential defenses to a foreclosure. Moreover, it's a good idea to make an appointment to speak to a HUD-approved housing counselor if you want to learn about different loss mitigation options and how to apply for loss mitigation.