Foreclosure is a judicial process in which a mortgage lender recoups some of its losses in the event of default by taking possession and/or ownership of the home that secured the loan in the first place in Erie, Pennsylvania Foreclosure usually involves a forced sale of the house at auction. Banks usually 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 overseen 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 entire balance will be covered, as well as the odds that there will be some money leftover for the borrower). In some states, original mortgages are "non-recourse loans," meaning that the lender can 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 Erie, Pennsylvania lawyer to see if this state is one of them. However, it is almost always the case that this protection does not apply to loans which have been refinanced.
How Can I Avoid Foreclosure in Pennsylvania?
First, you should never ignore the matter. As unpleasant as it seems, it is essential to stay on top of the issue. Ignoring the problem will never make it go away. You should remember that banks in Erie don't want your house. While the foreclosure process can be devastating for the homeowner, it's no walk in the park for the bank, either. They expected to make a profit through interest on the loan paid over time, and foreclosure is a last resort, allowing them to cut their losses and move on. If you are honest with them, lenders will usually try to accommodate your changed financial situation, to avoid a default on your part, and the necessity of foreclosing on their part.
If you can't reach a solution with your lender, there are other options. You could, 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 get the proceeds of the sale, and the rest of the debt will be forgiven. You might 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 relatively small loss, and allows the homeowner to keep their home.
How Can A Erie, Pennsylvania Attorney Help?
If you are faced with the possibility of foreclosure in Erie, Pennsylvania, an attorney might be able to help. At the very least, he or she can advise you of your legal options.