Cunningham Chernicoff & Warshawsky

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Mortgage foreclosure alternatives

In the last blog, we explored legal safeguards in place to protect your residence from foreclosure. This blog will explore remedies beyond legal safeguards within foreclosure litigation to save your home. So even if you cannot cure all of the arrears prior to a Sheriff Sale, alternatives exist to keep your family and you in your home.

The first alternative that we will explore is under Act 91 of 1983 which establishes the Pennsylvania Housing Finance Agency or PHFA. In fact, a mortgage company must provide notice of this program to a borrower before proceeding to foreclosure. PHFA primarily makes loans through the Homeowners’ Emergency Mortgage Assistance Program (HEMAP), secured by its own mortgage, to homeowners under a mortgage or installment sales agreement obligation or mobile-home purchasers who find themselves at least 60 days behind on their payments. Act 91 also provides for credit counselors to be made available to borrowers to consult with to determine if their services can resolve the payment problems. While there are a number of restrictions to qualify for a HEMAP loan, a successful application can resolve a mortgage foreclosure predicament.

A second alternative, when faced with a foreclosure, is a chapter 13 bankruptcy. Chapter 13 stops a foreclosure any time before the hammer falls at the Sheriff Sale. The Bankruptcy Code thereafter allows homeowners to pay back to the lender any arrears and costs incurred in the foreclosure over a 3 to 5 year period. The homeowner can also cure delinquent real estate taxes as well as municipal claims such as water and sewer bills. Bankruptcy offers other options depending upon your circumstances.

A person’s home is their castle and therefore the law provides for ways for to keep the homeowner in their home. If you are currently in a foreclosure action or fear you may soon be, contact us. We give second chances on Second Street.

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