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 East Petersburg, 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 an East Petersburg, 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, you should never dismiss the matter. As unpleasant as it seems, it is necessary to stay on top of the issue. Ignoring the problem will never make it go away. It is crucial to remember that the bank does not really want your East Petersburg house - they expected to make a profit through the interest on your loan, and that's what they'd prefer to do. Accordingly, they will probably make reasonable accommodations to your financial situation if it means that you will be able to make some form of payment to them.
If you can't reach a solution with your lender, there are other options. You can, for example, try a "short sale," which allows you to sell your house for whatever amount you can get, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank will receive the proceeds of the sale, and the rest of the debt will be forgiven. You might also consider a "short refinance" which allows a part of the debt to be forgiven, and lets you refinance the rest.
How Can A East Petersburg, Pennsylvania Attorney Help?
If you are worried about foreclosure, a good East Petersburg, Pennsylvania real estate attorney may be able to help. An attorney can increase your chances of keeping your home, and help minimize the financial impact if keeping it proves impossible.