Foreclosure Law in Pennsylvania

In Bellefonte, Pennsylvania is a process authorizing a lender of a mortgage to take possession or ownership of the property that secured the mortgage in the first place, to cut their losses when a borrower defaults on his or her loan.

A foreclosure typically involves a forced sale of the house at auction, so the bank can recover at least some of the loss it has incurred as a result of the default. Banks typically want to rid themselves of the property as soon as possible, collect as much money as they can from the sale, and then move on.

Like every other state in the U.S., Pennsylvania permits homeowners facing foreclosure to opt for a foreclosure by judicial sale. This is a procedure through which a court oversees the sale of the house by the lender. The purpose is to see that the lender takes reasonable steps to notify the public of the auction, and other steps to ensure that the house sells for the highest price possible. This is meant to protect the borrower, making it less likely that they'll have to pay a large deficiency judgment (the remaining amount due on the mortgage if the house sells for less than the remaining balance).

In a large number of states, but not all of them, mortgages are a type of loan identified as a "non-recourse loan." While the regulations governing these loans are complex, it most essentially means that, once the house is sold, and the sale price doesn't cover what the borrower owes, the lender can't go after the borrower for the remainder. They simply have to take the loss.

How to Possibly Avoid Foreclosure in Bellefonte, Pennsylvania

First and foremost, you need to communicate with your lender, and not dismiss the issue. Ignoring a problem with your mortgage will not make it go away, and can only make things worse. You should be forthright with your lender, and stay in touch with them as much as possible.

You must keep in mind that banks are in the business of lending funds, not flipping property: the bank doesn't really want your house. To that end, they'll occasionally go to great lengths to accommodate your financial situation, whatever it may be. For banks, foreclosure is a last resort.

Because banks don't specifically enjoy foreclosing, they will probably be willing to work out an alternative payment plan with you, if necessary. Nonetheless, if you think that this might be needed in the near future, you should contact your lender immediately. The sooner they know about it, the more options you have.

Some buyers in Pennsylvania, when none of the above options have worked, resort to a "short sale." This includes selling a house which is about to be foreclosed, typically for less than its market value. If the house sells for less than what's left on the mortgage, the homeowner is relieved of the duty to pay the balance. If you have decided that you have no hope of making your mortgage payments, and foreclosure seems inevitable anyway, this might be the way to go.

Can a Bellefonte, Pennsylvania real estate attorney help?

If you are worried that your Bellefonte, Pennsylvania house is going to be foreclosed, and want to try and stop this, a reliable real estate lawyer can help.