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 Johnstown, Pennsylvania Foreclosure normally requires the house to be sold at an auction. Normally, banks want to rid themselves of the property as soon as they can, in order to gather as much money as possible.

In every state, including Pennsylvania, there is an option to go through foreclosure by a judicial sale, which is a process in which a court supervises the sale of the property, and makes sure that the proceeds first go the to the holder of the mortgage, then to anyone else who may have a lien on the property, and lastly to the debtor if anything is left. 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 Johnstown, 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 necessary to remember that banks don't really want to own homes in Johnstown. In issuing a mortgage, they expect to make a profit through interest on the loan, and they'd prefer to continue collecting from you. Therefore, they're likely to make reasonable accommodations to your financial situation if it will allow you to keep paying them in the long run.

If no deal can be worked out, or the mortgage payments have become prohibitive, you may consider a "short sale". While the lender has to consent to it, many will take a moderate loss if it means avoiding foreclosure (which lenders typically treat as a last resort). This allows you to sell the house for whatever price it can fetch on the current market, and hand the proceeds over to the bank. If the sale nets less than the balance, some or all of the deficiency may be forgiven. You may also consider a "short refinance" which allows a part of the debt to be forgiven, and lets you refinance the rest.

How Can A Johnstown, Pennsylvania Attorney Help?

If you are facing the possibility of foreclosure, a good Johnstown, Pennsylvania real estate lawyer can help. At the very least, they will be able to inform you of your legal options.