"So what happens when they foreclose on my house?"

In previous blogs, I discussed ways to avoid mortgage foreclosure and settle the matter before a court action. But what happens when a homeowner cannot avoid a mortgage foreclosure or wants to take advantage of the time a foreclosure action takes to complete? In Pennsylvania, the mortgage company has to go through several steps before it can foreclose on a home.

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

First, a homeowner must fall behind a couple months on his or her mortgage payment. Once someone falls behind, the bank will send notice to the homeowner that it intends to proceed with foreclosure unless the homeowner acts. There are a couple options and they will be identified in the notice. If the homeowner does nothing or is unsuccessful in exercising the options available, the bank will file a complaint in foreclosure.

In many counties in PA, the court requires the homeowner and the mortgage company to attempt to settle the matter even after the complaint is filed. If the parties cannot work out a solution, the mortgage company is permitted to move forward with the foreclosure. The homeowner has 20 days to answer the complaint, Then the mortgage company can send a notice it intends to request a default judgment because the complaint wasn't answered.

If the homeowner still does nothing, a judgment in foreclosure will be granted to the mortgage. The judgment has to be sent to the sheriff's office to schedule the sale of the home. It will take time to schedule the sale. Up to the actual sale, the homeowner can save his or her home. They can work with the bank to make a payment and reinstate the mortgage. It is usually a large sum of money but it will put the homeowner back on track. If the homeowner cannot afford a lump sum payment, he or she can still file for bankruptcy under chapter 13 to protect the home and pay up the mortgage over time.

If the homeowner continues to do nothing, the home is sold by the sheriff. Once the home is sold, there is little chance of saving the home. But that does not mean the homeowner is forced out of the home the day of the sale. The property must be transferred to the new owner and then the homeowner will receive notice to vacate the property.

Even if the mortgage company takes every step as quickly as permitted by law, it is hard to complete the process in less than six months. In most case it will take close to a year to complete and some mortgage companies will allow this to drag out well over a year.

Some homeowners will not be able to work out an agreement with the mortgage company to save the home. Others may take advantage of the time it take to finalize a foreclosure. The time a home is in foreclosure, the mortgage company will not usually accept payment. The homeowner stays in the home rent free. This can be a time for the owner to save money before he or she needs to start paying rent again.

It is a long process to complete a mortgage foreclosure in PA even if a homeowner chooses to do nothing to save the home or is unsuccessful in using the various methods to save his or her home. If a person cannot save his or her home, he or she should consider using the time to save money.

Related blog entries:

Even in Chapter 7 Bankruptcy, returning your house to the bank isn't like taking a sweater back to the store

Market Watch - "... zombie foreclosures ..." up in New Jersey and "Philadelphia (5,405)"

Did you know a short sale of your home could create income for you? ... but not this year ...

Deed in lieu of foreclosure - You take the house and we're square ... right?

If you want assistance, legal representation, or just want to know more about Mark Medvesky or Medvesky Law Office, LLC, check out our website at www.medveskylaw.com.

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