If you have missed your mortgage payments, your lender will be required by Pennsylvania law to send a formal notice of intention to foreclose. This notice will tell you whom to contact and what you must do to stop the foreclosure. It also gives you at least 32 or 33 days before a complaint (formal document that starts the foreclosure process) may be filed. Unlike other states, Pennsylvania does not have nonjudicial foreclosure: every foreclosure action goes through the courts after a written complaint is filed in court. In order to stop foreclosure, it's important to have an understanding of how the legal process works and what options you have to try and stop the foreclosure.
It is a good idea to contact the mortgage servicing company (servicer) at the address or telephone number provided. However, before you do, you should develop a plan to try and make your payments. This may include one or more of the following:
If you choose to contact one of the credit counseling agencies, be sure to do it within 30 days of the mailing date on your notice. If your situation meets its requirements, the agency may help you submit an application to the Pennsylvania Housing Finance Agency (PHFA) for a loan. The foreclosure will not be filed in court while the application is being processed. Most people who apply to PHFA do not get assistance, so you should never pin your hopes on this alone. Once you have a plan, be prepared to discuss it with the mortgage servicing company.
If you do not respond to the foreclosure notice by the deadline, a mortgage foreclosure complaint will be served by a sheriff. Do not try to hide from the sheriff, since he or she will keep trying, sometimes at different times of day or night. After you receive the complaint, you will have 20 days to respond. At this point, you will need to file a response to the complaint, a process that an attorney can help with. Before you respond to the complaint, it's important to do the following:
That response might be an answer, which involves replying to each statement in the complaint. Or, if you hire an attorney who finds something wrong in the complaint, he or she might file preliminary objections. This means that a legal issue must be resolved before the complaint can be considered. It is important to realize that these are formal written documents that should be drafted by an attorney. If you try to draft your own response, you risk losing your case because you may not know how to speak the language of the courts.
If you do not send a response within 20 days, you will get a notice by regular mail saying that if you do not file a response in 10 days (from the sending of the notice) a judgment will be taken. It is critical that you do not let 30 days from the date of service go by without filing papers in court. Most foreclosures are won by default judgment. A default judgment is a notation entered on the court docket that the defendant lost the case for not filing a formal response in time. If you permit the plaintiff to take default judgment, you will probably never have another chance to negotiate a fair settlement.
Follow your case closely and keep in touch with your lawyer on a regular basis. Very often, after the foreclosure process has been slowed by your response, lenders or servicers will get interested in negotiation. You and your lawyer may be able to work out an arrangement that you can afford. Until then, keep working on your plan to make your mortgage payments. It can be done—don't be discouraged and don't give up.
If you hire a lawyer, you should expect to pay reasonable attorney fees. This is money worth spending, especially if you have equity in your home. Attorneys' fees depend on their experience and areas of expertise. Do not be shy about discussing fees. If you can't afford the proposed fee arrangement, tell the attorney what you can afford. You may be able to work out an arrangement that works for both of you.