A Pennsylvania foreclosure won’t start as soon as you miss a payment. Instead, the foreclosing bank or subsequent owner of the loan (the "bank") must normally wait for at least 120 days due to a federal law. This law ensures that a borrower will have time to ask for help with a foreclosure alternative, like a mortgage modification.
State law gives struggling homeowners additional foreclosure rights, as well, including the option to apply for a Pennsylvania financial assistance program (in most cases), and the right to reinstate (get caught up) on the loan. In this article, you’ll find out about foreclosures in Pennsylvania, as well as homeowner rights that might help you keep your home. (If you’d like to learn about foreclosure basics, start by reading Foreclosure and Your Home: Understanding the Process, Your Rights, and Your Options.)
When Can the Bank Start the Foreclosure?
If you fall behind on your house payment, the bank can sell your home and use the money to repay the debt in a process called foreclosure. In the past, the bank often completed the foreclosure before the homeowner had a chance to recover from a financial hardship or work out a foreclosure alternative, like a mortgage modification.
In 2014, the federal Consumer Financial Protection Bureau addressed the problem by setting forth a rule that prevents the start of a foreclosure, in most cases, until the borrower is behind 120 days or more. The waiting period allows the borrower to apply for “loss mitigation”—a foreclosure avoidance option. If the borrower fails to apply or doesn’t qualify for relief, the foreclosure can begin under the procedures allowed by Pennsylvania law.
Pennsylvania Preforeclosure Requirement
The bank must send the borrower a notice of its intent to foreclose at least 30 days before starting the state foreclosure process. The notice must give the borrower the chance to cure the default (catch up on the payments).
However, under some circumstances, the notice isn’t required, like if the borrower abandoned the house.
In most cases, the bank must also notify the borrower of the availability financial assistance under Pennsylvania’s Homeowner's Emergency Mortgage Assistance Program, and of the right to meet with a local consumer credit counseling agency to discuss ways to avoid a foreclosure.
Judicial Foreclosure in Pennsylvania
The bank initiates a Pennsylvania foreclosure by filing a lawsuit in court. The bank will win if it can get a judgment of foreclosure and sale allowing the bank to sell the house. The bank can prevail in one of three different ways:
- The borrower “defaults” by failing to respond to the lawsuit.
- The bank files a successful summary judgment motion that asks the court to find that no genuine issue of fact exists.
- The bank prevails at trial.
If the bank gets the judgment, the bank must post a notice of sale on the property and in the sheriff's office. Additionally, the notice must be served on the borrower and published in a newspaper once per week for three weeks.
Reinstating the Mortgage
Under Pennsylvania law, the borrower gets the right to reinstate the mortgage (pay the overdue balance, fees, and costs in one large payment) up to one hour before the bidding starts at the foreclosure sale. The borrower can do so only three times in a calendar year.
No Right to Redeem the Home After the Sale
Some states allow a foreclosed borrower to repurchase the home after a foreclosure sale. However, there’s no right of redemption in Pennsylvania.
Pennsylvania Deficiency Judgment
If the foreclosure sale brings less money than the mortgage balance, the borrower could still owe the bank money. In Pennsylvania, the bank can obtain a “deficiency judgment” for the outstanding amount if it files a separate lawsuit within six months. But if the foreclosing bank purchased the home at the foreclosure sale, the deficiency can't be more than the difference between the fair market value of the home and the mortgage debt.
How to Find Pennsylvania’s Foreclosure Laws
You’ll find Pennsylvania’s foreclosure laws in the Pennsylvania Statutes and Pennsylvania Rules of Civil Procedure. If you need more information about your rights, or aren’t comfortable reading the law on your own, consult with a foreclosure attorney.
Questions for Your Attorney
- Can I stay in the home during the foreclosure?
- How long does the foreclosure process take?
- Is there any way to stop the foreclosure?
