Foreclosure Law in Pennsylvania

In Sunbury, Pennsylvania is a process allowing 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.

Foreclosure most often is a forced sale of a house at auction, since those are the most common types of property bought through a mortgage. Banks will usually try to get rid of the property as quickly as they can, selling it for as much money as they can get in a short period of time.

Like every other state in the U.S., Pennsylvania allows 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 some states, original mortgages are regarded "non-recourse" loans. This means that once the house or other property that secured the mortgage is sold, and if it sells for less than the balance of the mortgage, the lender has to absorb the loss, and cannot sue the borrower for the remainder. This usually does not apply to second mortgages or refinanced loans.

How to Possibly Avoid Foreclosure in Sunbury, Pennsylvania

Communication between you and your lender is perhaps the most significant way to prevent foreclosure. Ignoring the issue is guaranteed to be counterproductive. Honesty is the best policy when it comes to dealing with lenders.

Bear in mind that banks aren't in the business of real estate speculation - they're in the business of lending money, and making profits through interest on their loans. In short, the bank doesn't really want your house - they'd much rather have you continue making your mortgage payments. For banks, foreclosing on a home is a last resort. Essentially, nobody likes foreclosures, and everyone wants to prevent them.

If you experience a sudden change in your financial situation, your lender, in an effort to keep you from defaulting, might be willing to accept lower monthly payments, at least temporarily.

As a last resort, you might consider a "short sale," which results in loss of the home, but it usually leads to a great deal of the debt on the mortgage being forgiven. Essentially, a short sale in Pennsylvania involves selling the house for whatever price it can fetch. The proceeds from the sale go to the lender, and if it sells for less than what's left on the mortgage, the balance of the debt is forgiven.

Can a Sunbury, Pennsylvania real estate attorney help?

In Sunbury, Pennsylvania, dealing with a possible foreclosure is never easy. However, the assistance of a reputable real estate lawyer can make the whole process much more bearable, and possibly delay or even prevent the foreclosure altogether.