Pennsylvania foreclosure process: timeline, notices and help

Is foreclosure judicial or non-judicial?

Judicial. A mortgage foreclosure in Pennsylvania is an “action” under the Rules of Civil Procedure. The complaint must name the parties, describe the mortgage and the land, state the default specifically, itemize the amount due, and demand judgment (Rule 1147). A court judgment comes before any sale; the property is then sold at a sheriff sale.

What notices must the lender send first?

Act 91 notice. Section 403-C of the Housing Finance Agency Law says a lender wanting to foreclose must send the borrower a notice, once the borrower is at least 60 days contractually delinquent or in violation of another mortgage term. The notice:

• states that the owner may qualify for help under the Homeowner’s Emergency Mortgage Assistance Program (HEMAP);
• itemizes what is past due;
• gives the phone number and address of a local consumer credit counseling agency;
• tells the owner they have 30 days plus 3 days for mailing to have a face-to-face meeting with a counseling agency.

The lender must send it at least 30 days before it demands full payment or starts a legal action (§ 403-C(b)(2)). The statute says this notice is in place of any other notice required by law, and it must include the information required by section 403 of Act 6 of 1974.

Act 6 rights. Act 6 (the Loan Interest and Protection Law) applies to residential mortgages of two or fewer units for a non-corporate borrower, up to a “base figure” of $217,873 in the statute, adjusted annually. After a notice of intention to foreclose, the owner may cure the default by paying what is due, plus reasonable fees and costs, up to one hour before bidding starts at the sheriff sale, no more than three times in a calendar year (41 P.S. § 403 and § 404, as published by the General Assembly).

What is the timeline?

If a sheriff sale is stayed, postponed or adjourned, new notice is generally required, with exceptions for a postponement to a date certain within 130 days (Rule 3129.3). The statutes do not set a total number of months; how long a case takes depends on the court, the sheriff’s calendar and any workout or HEMAP application.

Can I get the house back after the sale?

The cure right under Act 6, described above, ends one hour before bidding starts. We did not find a statutory redemption period after a sheriff sale in the sources we read, so do not count on one. Talk to a Pennsylvania attorney or legal aid immediately if a sale date is posted.

Deficiency judgments

If the property sells to the judgment creditor for less than the debt, the creditor must petition the court to fix the fair market value of the property before collecting the balance (42 Pa.C.S. § 8103(a)). If the creditor does not file within six months of the sale (§ 5522), the debtor, a guarantor or another interested person may file a petition with the court to fix the property’s fair market value (§ 8103(d)). Debtors and owners not named in the petition or served are discharged from personal liability on the debt (§ 8103(b)). This is why the six-month mark matters.

Help for homeowners in default

• HEMAP. Eligibility under § 404-C includes: a one-family residence or owner-occupied two-family residence that is the principal residence in Pennsylvania; at least 60 days of delinquency with the lender’s intent to foreclose; a hardship beyond the owner’s control; a reasonable prospect of resuming full payments within 24 months after assistance begins; and a favorable mortgage credit history for the past five years, with exceptions. As the statute reads on the General Assembly’s site, a mortgage insured by the FHA is excluded. PHFA runs the program; check its current guidelines.
• Philadelphia’s diversion program. Since 2008 the Court of Common Pleas has run the Residential Mortgage Foreclosure Diversion Program. When a lender files a foreclosure on an owner-occupied home, a conciliation conference is scheduled and the lender cannot enter judgment until the conferences end. Homeowners meet lender attorneys face to face, with free housing counselors, and legal aid attorneys are on hand. Conferences are held on Thursdays at City Hall, Courtroom 676, at 9:00 a.m. and 1:00 p.m., per the court’s page. A homeowner who thinks the case should have been designated may file a certification and ask for a conference. See Philadelphia for local context.

If you are behind, also read about FHA loans, escrow accounts and property tax.