The Foreclosure Process Explained

Step 1: I am behind on my mortgage payments

If you fall behind in your mortgage payments or your mortgage company bills you for additional charges you cannot pay or do not believe you owe and refuse to pay, you will receive any number of letters stating that if you do not pay, you may face foreclosure, lose your home and/or have negative credit information reported about you. Until you receive the official notice in Step 2, you are not really in foreclosure (although it may be treated that way by the mortgage company or credit agencies).

Step 2: I received a Notice of Intention to Foreclose

If you are less than 24 months behind on your mortgage, are behind less than $60,000 and do not have a federally insured mortgage (FHA), you must receive an Act 91 notice before your mortgage company can file a foreclosure case against you in court — at the top it says “Act 91 NOTICE — TAKE ACTION TO SAVE YOUR HOME FROM FORECLOSURE”. This notice may also be combined with a Notice of Intention to foreclose (for those whose original loan amounts were $217,873 or less), advising you of how much you are allegedly behind on payments or any other basis upon which the mortgage company claims you are in default and stating what you must do to reinstate your mortgage. If your original mortgage loan amount was $217,873 or less but you do not meet the criteria above for receiving an Act 91 Notice, you still must receive a “Notice of Intention to Foreclose”, advising you of how much you are allegedly behind on payments or any other basis upon which the mortgage company claims you are in default and stating what you must do to reinstate your mortgage.

Before these notices can be sent to you, you must be at least three months in arrears (they can be sent on the 2nd day of the 3rd month). These notices usually come by both certified and first class mail. There must be a separate notice for each person who signed the mortgage. The notices give you 30 days to “cure” (get caught up on) the delinquency and, if you are eligible, to meet with a housing counselor to apply for the “Homeowners Emergency Mortgage Assistance Payments” (HEMAP) program of the Pennsylvania Housing Finance Agency. If you “cure” the delinquency or, if you are eligible for HEMAP, you meet with a housing counselor, no mortgage foreclosure action can be started in court (there is no such thing as mortgage foreclosure outside of court in Pennsylvania).

The mortgage company cannot foreclose on your home while you have a pending HEMAP application. You MUST meet with an approved housing counseling agency within 33 days of the date on the notice to apply for HEMAP. NOTE: If you have an FHA loan you will not get an Act 91 notice, but you will get a notice telling you your rights. FHA loans are not eligible for HEMAP.

Step 3: I received a Complaint

If you do not “cure” your delinquency or meet with a housing counselor within 33 days, the mortgage company must file a legal document in the local Common Pleas Court, called a “complaint”, claiming that you are in default of the mortgage. Service of the mortgage foreclosure complaint. The Sheriff’s office in your county must hand deliver a copy of the mortgage foreclosure complaint to an adult at the homeowner’s residence (unless the Court has permitted a different form of service, such as posting on your door or certified mail). Responding to the mortgage foreclosure complaint. You have 20 days from the date the Sheriff delivered the complaint to respond either by filing preliminary objections or an answer, in the Common Pleas Court. You must also “serve” (send by mail) a copy to the lawyer for the mortgage company. Philadelphia Only: Conciliation Conference On April 16, 2008, the Philadelphia Court of Common Pleas created the “Residential Mortgage Foreclosure Diversion Pilot Program” to help homeowners save their homes. Foreclosures of owner-occupied homes filed after September 9, 2008, has a “conciliation conference” scheduled when the case is filed. Homeowners receive a notice stating when their court hearing is scheduled. Before appearing in court, homeowners must prepare a proposal to resolve the mortgage default and send it to the lawyer for the mortgage company. Homeowners can do so by scheduling an appointment with a certified housing counseling agency (see the Housing Counseling Agency Directory). Appointments can be scheduled by calling the Save Your Home Philly Hotline. At the conference, the mortgage company lawyer will be there, as well as a court-appointed mediator.

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