According to ATTOM, in May 2024, Pennsylvania had some of the highest foreclosure repossessions (real estate-owned or REOs), with 238 REOs. The site further stated that Pittsburgh, PA, had 80 REOs, making it one of the large metropolitan areas (with a population of over one million) that saw the most REOs.
If you’re also a Pittsburgh, PA, homeowner whose home is at risk of foreclosure, it pays to learn about the PA foreclosure timeline. Knowing how the process works is the key to protecting your home from foreclosure and safeguarding your Pennsylvania homeowner rights.
To that end, our team at Pittsburgh Cash Home Buyers, LLC put together this guide discussing:
- The Pennsylvania foreclosure process and its stages
- The laws surrounding the process
- Your rights and options to prevent and get out of a foreclosure
Keep reading to learn what to do if you get behind on your mortgage payments.
PA Foreclosure Timeline: The Stages and Laws
Preforeclosure and foreclosure are the two primary foreclosure steps in PA.
Preforeclosure starts immediately following your first missed mortgage payment. Under federal law, this stage lasts 120 days, after which a mortgage lender or servicer can file for foreclosure. During this time, you can still reverse the process and keep the house or, if you wish, sell your home even with its mortgage.
Foreclosure is when the mortgage lender can officially repossess or “seize” the property. They will then put it up for sale, usually through an auction.
Preforeclosure: What It Entails
The federal law, 12 CFR Part 1024 – Real Estate Settlement Procedures Act, or “Regulation X,” governs mortgages and protects consumers with mortgage loans. Under § 1024.41(e)(2)(iii) of this law, things are still in “preforeclosure” unless the borrower is already 120 days delinquent. So, from day 1 to 120 of delinquency, a mortgage lender or service can’t make the first foreclosure filing yet.
Here’s what you can expect during preforeclosure and when the events usually occur.
Grace Period
When you took out your mortgage in Pennsylvania, you likely signed two documents: the mortgage and the promissory note.
The mortgage establishes and proves the lender’s security interest in your property. It gives the lender the right to seize the home if you fail to repay the loan they issued to finance the property’s purchase. The promissory note is your signed promise to repay the loan per the contract’s terms.
The details of the grace period should be on either or both documents. You must know how long it is in your case, as this is when you can still make your loan payment without penalty, even if you fail to do so on or before the due date. For payments over 15 days late, lenders may charge a delinquency fee of 10% or $20, whichever is higher, per PA Statutes Title 7.
Your Lender Contacts You
Whenever you miss a payment, your lender will contact you by phone as required under Regulation X § 1024.39. They will call you within 36 days of each missed payment and recommend loss mitigation options, such as:
- Repayment plan
- Forbearance
- Mortgage modification
Your lender must also inform you of the above options in writing within 45 days of each missed payment.
Preforeclosure Notice
As published on Casetext.com, per PA Statute Article 41 Section 403, your mortgage lender must send you, the borrower, a notice of intention to foreclose at least 30 days before filing a foreclosure case. It gives you a month to catch up on your missed payments, known as “curing the default.”
Your Lender Sends an Act 91 Notice
If, after 90 days, you still can’t make your mortgage payments, your lender will send you an Act 91 Notice, per PA foreclosure laws. According to the PA Housing Finance Agency (PHFA), the Notice must contain information about the Commonwealth’s Homeowner’s Emergency Mortgage Assistance Program (HEMAP), which is:
- A state-funded loan program that lends funds to qualified homeowners behind their mortgage payments
- A way for homeowners to stop or postpone the foreclosure process
- A method for homeowners to keep their homes
The Act 91 Notice must also provide a list of approved consumer credit counseling agencies. Upon receipt of the Notice, you, the borrower, have 33 days to meet face-to-face with one of the agencies to discuss and apply for HEMAP. If you decide to apply for HEMAP, your counselor must submit your application within 30 days of the meeting.
PHFA will then review and decide on your application, which may take up to 60 days. Provided you applied on time, your lender can’t file for foreclosure within this period.
If PHFA denies the application, your lender can start the foreclosure process. If you get approved, congratulations, as you’ve successfully stopped the foreclosure. Just remember that HEMAP is a loan program, not a grant, so you must repay the funds loaned to you.
The Actual Foreclosure Process
Like preforeclosure, the foreclosure process is multi-step, starting with an official lawsuit. You can appeal by filing an answer and even reinstate the loan just before the foreclosure sale starts.
Here’s a breakdown of what happens during the foreclosure stage.
Your Lender Files a Foreclosure Lawsuit
After 120 days of delinquency, your mortgage lender will file a foreclosure lawsuit. They’ll file the case in the Court of Common Pleas in the county where your property is (in Allegheny County if your property is in Pittsburgh, PA). They must notify you by serving a “summons and complaint,” usually through the Sheriff.
You Can File an Answer to the Lawsuit
Once you receive the summons and complaint, you can file an answer and address each allegation the lender made against you. You can assert defenses or affirmative defenses to protect your home from foreclosure.
A defense is any reason why your lender shouldn’t have filed the foreclosure lawsuit in the first place. For instance, if you weren’t delinquent for over 120 days, that’s a defense.
On the other hand, an affirmative defense establishes a reason for which the court should not grant a judgment in favor of the lender. There are many viable affirmative defenses, such as if the lender has:
- Violated the Fair Debt Collections Practices Act
- Violated the Truth in Lending Act
- Committed predatory lending acts
- Failed to adhere to proper foreclosure procedural requirements
If you decide to appeal, you must provide proof of all your counterclaims.
If You Don’t File an Answer
If you don’t answer the court action, your lender can ask the court to grant a default judgment. The lender gets permission to proceed with a foreclosure sale in this case.
Your Lender Requests for Summary Judgment
Even if you file an answer or appeal, your lender may still request the court to grant summary judgment. According to NOLO, a summary judgment is when a court rules a decision in favor of the foreclosing party (e.g., your mortgage lender). The court may do this if your response doesn’t validate any issue or you can’t back your defenses with proof.
The lender can start the foreclosure sale if the court grants a summary judgment.
Your Lender Sells Your Home
If you lose at trial or the court grants a summary judgment, the lender will sell your home through a foreclosure sale. Per PA Rule of Civil Procedure 3129.2, at least 30 days before the sale:
- You must get a notice of the sale
- There must be a posted notice of sale on the property
- The Sheriff’s Office must also post a notice of the sale
There must also be a published notice in a newspaper once weekly for three consecutive weeks.
Foreclosure Eviction
In most cases, borrowers who will have their homes sold at a foreclosure sale can continue living in the property until there’s a new owner (the highest bidder). If they don’t leave the property after the sale, the new owner will likely serve them a “Notice to Quit.” It’s a demand to vacate the premises or get evicted.
Your Rights and Options for Avoiding a Foreclosure
In addition to HEMAP, you have several options to stop foreclosure throughout all the stages, even up to an hour before the bidding starts. Most involve curing the default per PA Statute Article 41 Section 403. Let’s examine each to decide which best suits your needs and budget.
Repayment Plan
A repayment plan is an agreement between you and your lender regarding your options to repay your delinquencies over time. In most cases, your lender will spread your overdue amount over several months, adding it to your regular mortgage payments. The goal is for you to catch up on your delinquent payments by making it easier to pay them back in smaller increments.
Forbearance
Forbearance is a temporary reduction or suspension of your mortgage payments. During this period, your lender won’t begin the foreclosure process. However, you must catch up on your delinquent payments after it ends, such as by making a lump sum payment.
Mortgage Modification
A mortgage modification involves a permanent change to your home loan’s terms. The primary goal is to make your new monthly repayments more affordable. The changes depend on your lender, but it may include:
- A lower interest rate
- An extension of the loan term (e.g., from 25 years to 35 years)
- Converting a variable interest rate mortgage to a fixed rate one
Mortgage Reinstatement
If you wish to remain in your home that’s already in foreclosure and about to get sold, you can reinstate it up to an hour before bidding starts at the foreclosure sale. At this point, however, you must pay the entire delinquent amount plus late fees, surcharges, and other reasonable costs incurred by the lender during the foreclosure process.
Sell Your House to a Direct Cash Buyer
Another viable option to stop foreclosure is to sell your Pittsburgh house yourself instead of waiting for the lender to seize it. You can then use the sale proceeds to pay off your lender and prevent them from filing a case against you.
If you decide to sell your house to avoid foreclosure, remember that time is of the essence, so selling it the traditional way may not always be a good idea. Instead, consider partnering with a direct cash buyer like Pittsburgh Cash Home Buyers, LLC. Here are some top reasons why.
Sell Your House as Is
Home sellers often go through a costly, lengthy process of prepping their houses for sale. For example, they usually:
- Hire an inspector for a thorough home inspection
- Make necessary repairs and replacements or value-boosting upgrades to the house
- Stage their homes
- Create property descriptions and listings to market their homes
- Communicate with potential buyers
- Schedule and conduct property showings
All those steps can take months, which you may not have if your home is at risk of foreclosure. The good news is that a direct buyer like Pittsburgh Cash Home Buyers, LLC allows you to sell your house without spending money. They can purchase your home in an as-is condition, saving you time.
Close Within a Week
The closer you are to your property’s potential foreclosure filing, the less time you have to sell your home the traditional way. However, with the help of a direct cash buyer, you can close within as little as a week.
Avoid the Long-Term Repercussions of Foreclosure
According to Experian, foreclosure stays on your credit report for seven years.
Unfortunately, because lenders consider foreclosure a negative item, you may have difficulty getting new credit as long as it remains on your record. Even if you get approved for a new loan or credit card, you’ll likely have to pay higher interest rates.
For those reasons, you should do everything possible to avoid foreclosure. Pittsburgh Cash Home Buyers, LLC can help by buying your home quickly before it gets sold at a foreclosure sale.
Stop Foreclosure and Its Negative Impact
Now that you know more about the PA foreclosure timeline, it’s time to develop a strategy to help you stop and avoid it altogether.
If you no longer want to keep the house and want to move somewhere else, consider working with our team of professional buyers at Pittsburgh Cash Home Buyers LLC. We’re a local, family-owned business, so we understand how PA foreclosure works.
Take advantage of our commission-free services and no-obligatory cash offer today! Speak with us, and we’ll happily help you avoid foreclosure and its long-term adverse effects on your creditworthiness.