Banks and mortgage companies typically will consider you to be in default on your mortgage if you fall three months behind on your payments.
Once you are in default, the legal process of foreclosure begins. A foreclosure is a legal process that allows a mortgage company to force the sale of your home to collect on your unpaid mortgage.
If you have fallen behind on your mortgage and are facing foreclosure, your lender typically will not accept any payments unless you catch up completely. Money orders or checks sent in for less than the full amount owed will be returned to you. If this happens to you, begin depositing your monthly mortgage payments into a savings account so that you will not get any further behind. Consult an attorney about your options.
For more information, review our frequently asked questions below.
An Act 91 Notice is a notice that you are behind in your mortgage payments advising you to apply for a HEMAP loan.
If you receive an Act 91 Notice go to your neighborhood HEMAP housing counseling office. Select an agency from the list in the Act 91 Notice, or call the Pennsylvania Housing Finance Agency at 800-342-2397 to find one near you.
For additional information, view:
Official HEMAP Program Website, Pennsylvania Housing Finance Agency
Philadelphia HEMAP Counseling Agencies
A FHA loan is insured by the Federal Housing Administration, which is now a part of the U.S. Department of Housing (HUD). If you have an FHA mortgage, your lender must consider you for HUD's Loss Mitigation Program, including a special forbearance, a loan modification or a partial claim. FHA loans are not eligible for HEMAP assistance.
For more information, view:
How to Avoid Foreclosure, U.S. Department of Housing (HUD)
Downloadable Version of the HUD Brochure How to Avoid Foreclosure
Yes. As a general rule, under Pennsylvania law you can stop the foreclosure sale if you can catch up on all of your mortgage payments AND pay the lender any reasonable attorney's fees and court costs that it has paid.
Sometimes a bankruptcy can help save a home. By filing a Chapter 13 bankruptcy petition, you can stop a sheriff sale and can catch up on your mortgage over 3 to 5 years, while you also make your regular monthly mortgage payments.
If you receive a Sheriff Sale notice, see an attorney
For more information about bankruptcy, visit Chapter 13 Bankruptcy.
If you have mortgage with a very high interest rate and fees or were required to borrow more money than you requested, you may have a predatory loan.
If you think you may have a predatory loan, contact a housing counselor, the Don't Borrow Trouble hotline, or see an attorney.
Philadelphia Housing Counselors
Philadelphia's Don't Borrow Trouble Hotline 215-523-9520, Pennsylvania Legal Assistance
To apply for free legal representation, you should come in for intake at either of our office locations.
For information about eligibility click here.
For intake hours and locations for predatory loans click here.
There are several options to explore to avoid a foreclosure.
1. Negotiate with the mortgage company.
Your mortgage company may be willing to enter into a repayment plan, which would allow you additional time to catch up on your payments. You also may be able to get a loan modification, which may extend the term of your mortgage, lower your interest rate or monthly payments, making the loan more affordable. Housing counseling agencies can help you negotiate with the lender.
2. Apply for mortgage assistance loans and grants.
There are several interest free or low-interest loans and grants to help you repay past due payments. See Mortgage Assistance for more information.
3. Consider refinancing.
You may be able to get a new loan to extend the term of your mortgage or to lower your interest rate.
4. Get legal advice about a Chapter 13 Bankruptcy.
Sometimes a bankruptcy can help save a home. By filing a Chapter 13 bankruptcy petition, you can catch up on your mortgage over 3 to 5 years, while you also make your regular monthly mortgage payments. There is a $274 filing fee. Chapter 13 bankruptcies can be complicated, and most people will need to be represented by a lawyer.
To apply for free legal representation, you should come in for intake at either of our office locations.
For information about eligibility click here.
For intake hours and locations for bankruptcy click here.
5. Consider Selling the House Before Foreclosure.
If you cannot afford to pay your mortgage and it is unlikely that you will be able to do so in the future, you may want to consider selling your home. While this may be a painful option, you will be better off than letting the lender sell your home at a sheriff sale.