As the moratorium ends, many Pennsylvania homeowners who are behind on their mortgage payments find themselves wondering exactly how the process works. We’ve put together step-by-step information to explain how the foreclosure process happens and what you can do to stop it!
Concequences of Missing a Mortgage Payment
When you take out a mortgage to get a house, you sign both a promissory note and a mortgage contract. These papers promise that you will pay back the money owed in a certain manner and also give the lender the chance to sell your house to recoup payments through foreclosure if you can’t meet your payments. Most lenders typically offer a 10-15 day grace period where you can catch up; however, if you don’t make the payment within this timeframe, you may be fined some late charges.
Missing Multiple Mortgage Payments
After you have missed more than one payment, you can expect your lender to start trying to get in touch with you through phone calls and letters to resolve the missed payment. Laws make it necessary for lenders to contact you within certain time frames unless you’re in the midst of a bankruptcy or you’ve asked not to be contacted. Most loans are set up to require that the lender send out a breach letter that lets you know when your mortgage falls into default.
To have your house foreclosed upon, you typically need to have been 120 days past due on your mortgage payments. Occasionally, lenders can expedite the process if a due-on-sale clause has been violated. A due-on-sale clause is a provision in a mortgage contract that requires the mortgage to be repaid in full upon a sale or conveyance of a partial or full interest in the property that secures the mortgage.
Before the foreclosure process can actually start, the lender will need to send out a notice of their intent to foreclose 30 days in advance. This is the timeframe when homeowners can reach out for help and potentially work to get their payments caught up. If the homeowners choose to talk to an approved credit counseling agency, the foreclosure will be postponed an additional 30 days from the meeting. However, if the homeowners are unable to catch up on payments within this short timespan, bankruptcy may be the better solution.
Filing the Foreclosure
If you don’t take any action to make payments, the lender can take the foreclosure to court. The homeowner can respond to the lawsuit, which then goes to court. If the court rules against the homeowner, their property will be sold in a foreclosure sale. On the other hand, if the homeowner doesn’t respond to the lawsuit, the court will automatically give the green light for the foreclosure sale to begin.
What’s the Best Option?
If you’re behind on your payments and your home is in foreclosure, it can be difficult to know what to do! If you are able to come up with the money to get your mortgage up-to-date along with all fines and interest, you can save your home by paying it within an hour of the start of the foreclosure sale.
If the homeowner is unable to make that payment, there is a better option. By consulting with a bankruptcy attorney a homeowner can work to alleviate their debt and save their home through the foreclosure process. Filing for bankruptcy will put an automatic stay on your home’s foreclosure and will allow you to remain in it until your debts are figured out. While the foreclosure process can seem like being up against a brick wall for those struggling financially, there is hope! By working with a good bankruptcy attorney, you can learn about your best options to stall the process, regain control of your finances, and stay in your home!
Contact one of our bankruptcy lawyers to discover any steps that your lender might have missed, learn more about your options, and see how bankruptcy can help you to keep your house. No matter how dismal things may seem, our bankruptcy attorneys can help you discover a better option!