If you need to consult with an attorney or would like more information on mortgage foreclosure, please contact the Erie County Bar Association's Lawyer Referral & Information Service.
If you have fallen behind in your mortgage payments you may find that your lender will start legal proceedings against you. This procedure is called mortgage foreclosure and is the lender’s way of securing possession of your house to protect the money that they have loaned you. Remember, the lender does not really want your house, but it does want the payments to be made.
If you are having a hard time making your payments because you have lost your job, you have had serious medical problems, you are going through a divorce or any other serious reason, talk to your lender before you get behind in any payments. Sometimes, a lender is willing to make special arrangements to help you through a brief, difficult time.
If you don’t talk to your lender before you get behind, three things will happen. First, the lender will send you a letter telling you that you are in default of your loan agreement and what you will have to pay to catch up to get current on your mortgage. Second, you will receive an Act 6 Notice. When you receive this notice, contact an attorney immediately. This notice will explain your options. If you ignore this notice, mortgage foreclosure will be started. Third, with the Act 6 Notice you will receive an Act 91 Notice. When you receive the Act 91 Notice, contact an attorney immediately. This notice is important because, among many other things, it explains to you how you may get financial assistance to prevent the mortgage foreclosure.
If you ignore these letters and notices, you will likely incur additional debt of over $2,000.00 for Court costs. Eventually the lender will have the sheriff serve you with a Complaint in Mortgage Foreclosure. Contact an attorney immediately if you have not previously done so because a strict time limit of twenty (20) days exists to answer this Complaint in Mortgage Foreclosure or you will lose important rights. If you fail to file an answer to the Complaint in Mortgage Foreclosure, a judgment by default will be taken against you and eventually your house will be scheduled for sale by the Sheriff. You may stop the Sheriff’s Sale up to one hour before the sale by paying all past due and current payments, penalties and costs which, at that late date, will be significant.
Even after the sale you may have liability for any differences between the total of your mortgage payoff plus all costs and expenses, and the amount actually received at the sale. This difference is called a deficiency and is your personal obligation under the promissory note you signed when you purchased the property and obtained the loan. The lender must go through another Court hearing to establish the amount of deficiency, but once the amount is determined, your other assets may be at risk of being sold to pay off the delinquency.
Remember, if you are having a problem making your mortgage payments, contact your lender immediately – do not delay as time is of the essence.
Information is current as of 2/2019.