Pittsburgh Foreclosure Lawyers
Mortgage Foreclosure Defense
Foreclosure. Fewer words strike more fear in homeowners.
Am I going to lose my home? Am I going to owe money as well? How do I respond? Do I have any defenses? If I don’t have defenses, how long can I stay in my home? Can I modify my mortgage? Can I save myself with a refinance?
Breathe. You have options. You have defenses – many more than you might think.
Pennsylvania’s foreclosure process is lengthy, granting borrowers numerous opportunities to save their homes or extend the time they can remain in them for many months, if not years.
But you have to engage the process. You cannot ignore a foreclosure. The difference between saving your home or remaining in it for an extended period of time versus losing it quickly is this simple: Take Immediate Action.
The first step in a foreclosure will be the Sheriff of your County serving you with a complaint. The complaint will state that you have 20 days to respond to it from the date the Sheriff hands it to you. At this point, you should immediately speak with qualified legal counsel – attorneys with backgrounds in mortgage foreclosure defense.
What Advice Will Our Pittsburgh Foreclosure Lawyers Provide to You?
A good foreclosure defense lawyer will walk you through Pennsylvania’s foreclosure process, advising you of the following:
- You must respond to the foreclosure complaint or a “Default Judgment” will be taken against you, which will allow the lender or servicer to take your home through a Sheriff Sale.
- If you answer the complaint, that will compel your lender or servicer to engage in a long process which will cost it money, which may incline it to offer you a mortgage “modification” in which your mortgage is adjusted to require payments you can afford.
- After you file an answer, many months of what is called “discovery” will take place, during which time you will be able to ask the lender or servicer for various documents, to see if there are any technical defects in its claim that you can use as defenses.
- After the discovery phase ends, typically, a lender or servicer will file a motion with the Court seeking judgment against you.
- If your lawyer has found facts which provide a defense to that motion, you may be entitled to take your case to trial.
- Typically, lenders and servicers do not want to go through trials, as that requires them to produce numerous witnesses to prove their claims, many of whom are often out of state.
- If compelled to take a case to trial, a lender or servicer which has previously refused to modify a mortgage will sometimes do so, as some prefer to take that route rather than bear the cost and aggravation of trial.
Our Pittsburgh Foreclosure Lawyers will advise you that while all of this is taking place, you should be saving the money you would otherwise be paying on the mortgage. Some lenders and servicers offering mortgage modification want down payments against the newly modified mortgage. Alternatively, if you ultimately cannot stay in the home, you will need the money to secure new lodging.
What About “Conciliation”?
In some Pennsylvania counties, around the same time you are served with a complaint, you will receive by mail a notice of your right to participate in a “Conciliation Conference.” You should follow the directives of that notice.
At a conciliation conference, a “Master” will compel your lender or servicer to discuss possible modification of your mortgage with you or your attorney. Usually, the lender or servicer will ask you for various financial documents and you will be provided with 30-60 days for the lender or servicer to determine if it can modify your loan. Multiple conferences may be held.
PLEASE NOTE: THAT YOU ARE DISCUSSING MODIFICATION OF YOUR LOAN WITH YOUR LENDER OR SERVICER DOES NOT EXCUSE YOUR OBLIGATION TO RESPOND TO YOUR COMPLAINT. UNLESS THE COURT HAS EXPLICITLY “STAYED” YOUR CASE, YOU STILL HAVE TO RESPOND TO IT OR THE LENDER OR SERVICER WILL TAKE A DEFAULT JUDGMENT AGAINST YOU.
Conciliation efforts can extend the duration of a foreclosure case by many months.
What Are My Defenses to a Foreclosure?
Most defenses are technical. This is why it’s important to hire qualified Pittsburgh Foreclosure Lawyers:
- The lender or servicer does not have the original Note that went along with your Mortgage in which you agreed to repay the money owed on your home;
- If your Mortgage was sold to another lender or servicer other than your original one, the new one may not be able to produce all the documents showing it owns or has the right to bring the foreclosure against you;
- The lender or servicer may not be able to produce proper witnesses to “authenticate” the documents it needs to prove its case under Pennsylvania law;
- The lender or servicer has inappropriately had an employee or agent who knows nothing about your mortgage prepare affidavits stating he or she is familiar with it;
- The lender or servicer has failed to provide you with notice required prior to initiation of a foreclosure action.
These are common defenses. More are available, depending on the specific facts of each case.
Am I Being Sued for Money as Part of the Foreclosure?
No. If you look at the foreclosure compliant, you should see a reference to the action being “in rem” somewhere on the document. “In rem” defines the complaint as one solely seeking property and not against you individually, even though your name will appear as a defendant.
What are My Best Results in a Foreclosure?
The best result for homeowners seeking to stay in their residences with the means to do so if payment obligations are decreased is modification. The best result for homeowners who currently lack means to remain is to extend the process to afford them the maximum possible time in which to acquire a new or better job which allows them to remain.
For homeowners with children who lack means to retain the home, the most important result is keeping them in their homes through the end of the current school year.
What Happens if I Do Not Get a Modification and Lose My Foreclosure Case?
In that case, your home will be exposed to Sheriff sale, usually within four months’ time. However, you may still receive a mortgage modification during this time. Lenders or servicers may grant modifications right up until the time the home would be sold at Sheriff sale, as you will continue to remain the owner of record until the moment that sale is complete. Experienced Pittsburgh Foreclosure Lawyers can file motions on your behalf to postpone a Sheriff sale of your home in the event such resolution appears to be possible.
What Happens if My Home is Sold at Sheriff Sale?
You still have rights to remain in the home for a period of time. But again, you must promptly take action to preserve your rights.
If a homeowner remains in a residence after a lender or servicer has taken title to the home or it has been sold to the third party, the new owner must file an action in “ejectment” against you. This will typically happen a few months after the home has been sold at Sheriff sale. If you wish to remain in the home for a period of time, you must respond to the ejectment complaint, just as you did the foreclosure complaint.
A response should buy you several more months in the home, as the lender, servicer, or third party purchaser is required to reply to defenses or objections raised in it and then file a motion to seek an judgment granting it possession of the home, a l
engthy process. Often, the new owner will offer the prior homeowner “cash for keys” to leave or grant them a specified time to remain as a settlement in lieu of further litigation. In some instances, homeowners remaining post-Sheriff sale have been offered leases by new owners.
What Happens to My Equity Post-Sheriff Sale?
If your home is sold at Sheriff sale, after the mortgage is paid off, along with attorney fees and certain Court and Sheriff costs, your remaining equity will be paid to you.
Will I Owe a “Deficiency” if My Home Sells for Less Than the Mortgage at Sheriff Sale?
Technically, under Pennsylvania law, mortgages are “recourse.” This means that if the lender or servicer chose to do so, post-Sheriff sale it could initiate a separate legal action to seek a judgment against the homeowner for the shortfall between the mortgage balance and what the home sold for at Sheriff sale. This is an exceedingly rare event, nearly unheard of, because: (1) most lenders and servicers have insurance covering them for the shortfall; (2) there are significant costs involved in bringing such actions; and, (3) lenders and servicers know they will not be able to collect judgments against homeowners who could not afford to keep their homes.
We Can Protect You!
If you’ve been sued in foreclosure in Pennsylvania, please contact us for help. We have expert foreclosure defense counsel on staff who can help you keep your home.
Let us win your next fight.
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