Following the subprime mortgage crisis, homeowners in the Philadelphia region were faced with underwater mortgages, rapidly declining house values, and foreclosure warnings. A variety of factors might lead someone to fall behind on their mortgage payments. Job loss, sickness, divorce, and unexpected bills are a few examples. Any of these can put you in financial jeopardy.
You should be aware that you have the ability to avoid a house foreclosure. In fact, you can take action even before receiving a default notice. This post will go into further detail and teach you how to avoid a house foreclosure in Philadelphia PA and sell your property to a cash home buyer.
Pennsylvania Foreclosure Laws
Pennsylvania foreclosure processes and mortgage loan management are extensively regulated by state and federal legislation. The majority of these regulations safeguard borrowers. In general, servicers must give homeowners loss mitigation options, account in detail each foreclosure stage, and rigorously adhere to foreclosure rules.
In addition, most individuals who qualify for a mortgage to buy a home in Pennsylvania should sign a mortgage as well as a promissory note. Additionally, to state and federal legal safeguards, these papers provide homeowners with contractual rights. With a Pennsylvania foreclosure, you will almost certainly be granted the following rights:
- Pay down the entire debt to avoid a foreclosure auction
- Collect any remaining funds following the foreclosure sale
- Attend a foreclosure (dependent on the county) conciliation conference
- To obtain extra safeguards if you are a member of the military
- Given notice of the foreclosure as well as an opportunity to reply in court
- Get pre-foreclosure notices
- To avoid the auction, keep up with the outstanding amounts
- Make a claim seeking loss mitigation
If you’re a homeowner of a single-family home or a townhome in Pennsylvania who’s defaulted on your mortgage payments, don’t be caught flat-footed. Understand each stage of the Pennsylvania foreclosure, out of the first missed payment through the foreclosure sale. Once you grasp the criteria, you can take advantage of your situation and find a way to preserve your home.
Foreclosure Process in Pennsylvania
When you fall behind on your loan repayments for your Pennsylvania property, you will face judicial foreclosure. According to Pennsylvania law, a bank must take many measures to initiate and finish the foreclosure process, including, but not limited to:
- First and second notice of intent to foreclose required
- The mortgage holder (typically the bank) makes a complaint against the homeowner
- The homeowner is served with the complaint and given the option to respond
- Either the bank or the homeowner wins the case.
Prior to beginning the process of foreclosure, the Pennsylvania constitution allows the lender to provide the borrower with a 30-day notice to foreclosing intent, giving you the chance to correct the default. However, if you desert the house, you are not obligated to provide this notification.
In most situations, the lender also needs to issue a letter detailing the rights accrued to the homeowner and providing what aid is present, including the opportunity to seek assistance from the Pennsylvania Housing Finance Agency (PHFA) through the Homeowners’ Emergency Mortgage Assistance Program (HEMAP). However, if indeed the agency lacks funding, this obligation does not apply. (35 Pa. Stat. Ann. §1680.409c).
The foreclosure process in Pennsylvania is relatively lengthy. From start to finish, the complete procedure takes on average 270 days.
Can You Avoid Foreclosure in Philadelphia?
If you fall behind on your mortgage or property tax payments, you may be able to work out a solution with your taxing authority or lender.
Mortgage Modification: You could extend the term of your mortgage loan and/or refinance. This may assist you in catching up by lowering your monthly payments to a more manageable amount. You could be eligible if you’ve recovered from a financial setback and can afford the increased payment level.
Special Forbearance: Your lender could work out a repayment plan for you depending on your financial condition, and they may even allow for a temporary decrease or suspend your payments. You may be eligible if you have recently suffered an increase in living expenditures or a decrease in income. You must provide details to your lender to demonstrate that you will be able to satisfy the new payment plan’s obligations.
Property Tax Payment Plan: Should your property be at risk of foreclosure related to tax delinquency, the City of Philadelphia Revenue Department will work with you to devise a payment plan that will allow you to pay off the amount of your late taxes over a period of many months.
Pre-foreclosure Sale: This allows you to avoid foreclosure by selling your home for less than the amount required to pay off your mortgage obligation. You may be eligible if:
- The loan is at least two months late
- A fresh appraisal (which your lender will acquire) demonstrates that your home’s worth matches HUD program standards
Partial Claim: Your mortgage lender may be able to negotiate with you to acquire a one-time payment from the FHA Insurance Fund in order to bring your mortgage up to date. You may be eligible if your loan is at least four months late but no more than 12 months late. You can now start making full mortgage payments.
Deed-in-lieu of foreclosure: As a final option, you may well be able to “surrender” your asset to the lender voluntarily. This will not preserve your home, but it will be less detrimental to your credit than a foreclosure. You may be eligible if:
- You’ve defaulted and are ineligible for any of the other alternatives
- Your effort to sell the residence prior to foreclosure was futile
- You do not have any other FHA mortgages that are in default
How to Avoid Foreclosure in Philadelphia
Remortgaging your property, considering a short sale, sheriff sales, or selling to a cash home buyer are all possible options to prevent foreclosure. Of course, if you can work out a loss mitigation strategy, such as a loan modification, you can avoid foreclosure.
Remortgage Your Pennsylvania Home
You can obtain a new loan to pay off your existing mortgage debt. Obtaining mortgages for persons who have experienced foreclosure is not easy. If you are late on your mortgage payments or have poor credit, it may be difficult to refinance. This typically necessitates having some equity in your property. Refinancing can lower your monthly payments.
Considering a Short Sale
A short sale happens when a homeowner who is in severe financial distress sells their house for less than the amount owed on their mortgage. The lender of the original mortgage receives the entire selling profits and either forgive the difference or obtains a deficiency judgment, which forces the original borrower to pay the difference.
If you can’t afford your mortgage and house prices in your neighborhood have fallen, you may not have much of a choice. A short sale may be able to assist you to protect your credit in certain ways by avoiding a foreclosure on your record.
Selling to a Cash Home Buyer
Selling your house to cash purchasers indicates that you will no longer use and pay a real estate agent’s commission. Aside from that, you will not be required to pay any closing charges.
Whenever you can’t afford to keep paying mortgage payments but can sell the house for a profit, you should. For starters, it will protect your credit by demonstrating that the home was sold rather than going into foreclosure. It may also enable you to turn a profit. Lastly, if you sold your house instead of letting it go into foreclosure, you could have a simpler time qualifying for a mortgage whenever your circumstances improve.
Selling a house by owner (FSBO) has its own pros and cons, though it’s an option that you could consider.
Companies Who Buy Houses Fast in Philadelphia
Selling to a firm that buys houses for cash may be your only choice if you need to sell your property quickly or can’t afford major renovations. A standard real estate agent in Philadelphia county might take up to 87.5 days to sell your house. In comparison, a cash buyer can complete the purchase in one to two weeks with no out-of-pocket costs.
However, a firm that buys houses will only offer you (at most) 70% of your genuine property worth. Many sellers may make significantly more money on their house sales if they take a different strategy. You might also go to their websites for assistance in locating PA foreclosure listings. You may save searches by property type, price point, or neighborhood, by using the filters.
Some of the foreclosure homes for sale in Philadelphia include 6209 Chestnut St, Philadelphia, PA 19139, Century 21 Advantage Gold-Elkins Park, 2055 N Orkney St, West Oak Lane Homes, 5633 Upland Way, 4708 Higbee St, Philadelphia, PA 19135, Philadelphia, PA 19131, 1512 S Dover St, Philadelphia, PA 19146, 1632 W Mentor St, a townhouse in Philadelphia, PA 19141, 318 S 4th St, Philadelphia, 1937 Ridge Ave, Philadelphia, PA 19121, and 319 E Meehan Ave, Philadelphia, PA 19119.
It is your responsibility as a homeowner to take all required procedures to keep your home from foreclosure. The simplest solution is to avoid the conditions that lead to it. High debt, adjustable-rate or unusual mortgages, insufficient emergency funds, a lack of insurance, and purchasing a property you cannot afford all raise your chances of foreclosure.
At Problem Property Pals, We buy houses in Philadelphia in any condition for a fair cash offer. If you’re wondering, “how can I sell my house fast Springfield,” or you’re looking to put your home under foreclosure listings, we are cash home buyers in Pennsylvania. We can also advise you on Real Estate Owned (REO) homes for sale, and the benefits of selling to cash home buyers.