Foreclosure is a legal procedure in which a mortgage lender recoups some of its losses in the event of default by acquiring possession and/or ownership of the home that secured the loan in the first place in Doylestown, Pennsylvania Foreclosure typically involves a forced sale of the house at auction. Banks typically want to rid themselves of ownership of the home as soon as possible, collect as much money as they can, and then move on.
In every state, including Pennsylvania, borrowers have the option to go through foreclosure by judicial sale. This means that the auction will be supervised by a court, to make sure that the bank makes an effort to get as high a price as possible (to increase the chances that the whole balance will be covered, as well as the odds that there will be some money leftover for the debtor). In some states, original mortgages are "non-recourse loans," meaning that the lender may only recover ownership of the house in the event of default. If the house is now worth less than the balance of the mortgage, the lender has to take the loss. You should speak with a Doylestown, Pennsylvania attorney to see if this state is one of them. However, it is almost always the case that this protection does not apply to loans that have been refinanced.
How Can I Avoid Foreclosure in Pennsylvania?
First and foremost, you should not dismiss the possibility of foreclosure. Failing to respond to collection calls from your lender will not make the problem go away. As unpleasant as this may seem, you should stay in contact with your creditor, and be forthright with them. One should remember that banks usually don't want to take your house in Doylestown. They issued your mortgage expecting to earn a profit on the interest. Taking possession of, and selling, your house is a last resort for them. Therefore, if you are forthright with them about your financial situation, they are likely to make reasonable accommodations to keep you from defaulting.
If you can't work things out with your lender, there are other avenues. You can try a "short sale," which is when you sell your house for whatever amount you can get for it, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank still receives those proceeds, but the remainder of the loan will be forgiven. You may also try a "short refinance" which allows a piece of the debt to be forgiven, and the rest refinanced. This allows the bank to wash its hands of the matter, while taking a comparatively small loss, and allows the homeowner to keep their home.
How Can A Doylestown, Pennsylvania Attorney Help?
If you are facing the possibility of foreclosure, a good Doylestown, Pennsylvania real estate lawyer can help. At the very least, they will be able to inform you of your legal options.