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Allentown Mortgage Foreclosure Defense Lawyer

If you are a homeowner, few things are as distressful as having a foreclosure notice taped to your front door. We are aware of the emotional trauma associated with the thought of losing your home, and our attorneys are dedicated to helping homeowners in your situation find alternative options.

After your lender informs you of its intent to foreclose on your home, our lawyers can review your situation to see if you have a viable defense against foreclosure or if seeking an alternative solution would be best. For example, filing for bankruptcy can stop all parts of foreclosure, including upcoming sheriff’s sales. Getting a loan modification or forbearance could also help you avoid foreclosure. If you do not take steps to retain ownership of your home, the bank might seize it and offer it to the highest bidder at a sheriff’s sale.

You can call our Allentown mortgage foreclosure defense lawyers at (215) 701-6519 to get a free case evaluation from Young, Marr, Mallis & Associates today.

How Mortgage Foreclosure Starts in Allentown

Life rarely goes as planned, and a financial setback – no matter how small – might have rippling effects on your entire life. Illness, divorce, job loss, or a death in the family could have a devastating impact on your ability to pay your monthly expenses. Because you need to pay for necessities, that monthly mortgage payment gets ignored, and soon, you are four or five months behind.

Within 36 days of missing your first mortgage payment, your lender must call you to review possible loss mitigation options under 12 U.S.C. § 1024.39(a). The mortgage company will follow up phone calls with a letter detailing your available options within 45 days of your default.

If your lender intends to foreclose on your home and 90 days have passed since you missed your mortgage payment, you will receive an official Act 91 Notice.

Thirty days after receiving the Act 91 Notice, should you fail to take any action, your lender could file a foreclosure complaint against you in civil court.

If you want to maintain possession of your home, you should be proactive once you receive any letters or notices from your mortgage company regarding default. If you do not respond to a mortgage foreclosure complaint, it will go uncontested, and you could lose your home in Allentown.

Using Bankruptcy to Stop Mortgage Foreclosure in Allentown

Sometimes, homeowners do not have a strong defense against a mortgage foreclosure. People fall behind on their mortgage payments for various reasons, ranging from job loss to extended illness. If you cannot cure your mortgage, you might have other options.

Once foreclosure begins, lenders typically will not accept anything less than repayment of the full delinquency. If a homeowner has the funds to pay their regular monthly mortgage payment but cannot pay the delinquency, filing for Chapter 13 bankruptcy could be the best option to stop the foreclosure and save their home.

Chapter 13 bankruptcy will stop all foreclosure proceedings, including a scheduled sheriff’s sale. The process is also administrative, not adversarial, so mortgage lenders have limited ability to object to bankruptcy or have their lawyers bury homeowners’ cases.

As part of your bankruptcy filing, our foreclosure defense attorneys will propose a bankruptcy repayment plan that lists the amount you owe to your mortgage company and the amount you will pay each month to cure the arrears. In Allentown, homeowners have up to five years to pay arrears to lenders through Chapter 13 bankruptcy.

Your lender will file a claim in your case that will provide documentary evidence, including a payment history of the amount you owe. We will thoroughly review the mortgage company’s documents to determine if the amount listed is accurate and either amend your plan to reflect the correct amount or file an objection. Once the bankruptcy court approves the plan, the homeowner and the lender are bound by its terms.

Short Selling Homes Under Mortgage Foreclosure in Allentown

A short sale is often indicative of serious financial distress. With foreclosure looming, homeowners might consider proceeding with a short sale but should know the pros and cons before doing so.

A short sale occurs when a homeowner lists and sells their house for less than what they owe on their mortgage. The proceeds of the short sale go to the lender, who can forgive the outstanding balance or seek a deficiency judgment against the borrower to recover the remaining amount on the mortgage. Before you can go through with a short sale, you will have to get your lender’s approval.

Short sales still leave borrowers without their homes but are less adversarial and stressful than foreclosures, generally speaking. For example, when your house is foreclosed upon, your lender will seize it and promptly sell it at a sheriff’s sale. When you short-sell your home, you can be more involved in the process.

I’m Depending on how much you owe on your mortgage, selling your home through the short sale process could leave you without equity in any assets. Furthermore, suppose you are close to paying off your mortgage when foreclosure comes knocking. In that case, our mortgage foreclosure defense lawyers may be able to renegotiate your current agreement to make repayment more feasible and so that you can easily make future payments. You do not have to short-sell your home if you have missed several mortgage payments, as there are other options, such as defending the foreclosure claim or filing for bankruptcy.

Allentown Mortgage Foreclosure Diversion Program

Allentown participates in a mortgage foreclosure diversion program to help homeowners who risk losing their homes. After your lender files a foreclosure complaint against you, the Court of Common Pleas will issue a case management order scheduling a mediation conference.

The conference is designed to allow homeowners and mortgage company representatives to meet and find an alternative solution to foreclosure. Our attorneys can represent your interests at the conference, working on your behalf for a beneficial resolution.

If you participate in a mediation program, foreclosure proceedings will be suspended pending a court order. Nonetheless, depending on the facts of your case, our Allentown attorneys might recommend filing an answer to the mortgage complaint to preserve your rights.

Alternative Solutions to Mortgage Foreclosure in Allentown

During the mediation process, we will assist you in negotiating with your lender’s representative. Our goal is to find you a beneficial alternative to foreclosure, ensuring you thoroughly understand all of your options.

Forbearance

If your financial setback is only temporary, a forbearance might be a better option. Your lender could agree to suspend your payments or accept a substantially lower monthly mortgage payment for a short time. Or, your lender might agree to alter the interest rate on missed payments for some time. After the forbearance period, you could be required to pay a higher monthly payment over several months to repay the deficiency. To qualify for forbearance, you must provide evidence of the short-term problem and proof that you can afford the increased payment amount.

Creditor Error

There are also times when your lender could have made an error in applying your payments to your account or may have acted unscrupulously, requiring a vigorous defense against the foreclosure. Our seasoned mortgage foreclosure defense lawyers will carefully review the foreclosure complaint and all supporting documentation and payment histories to determine if you have a valid defense or an alternative to foreclosure – like bankruptcy – is available.

For example, if, when originally giving you a loan, the lender knew you would be unable to meet payments but proceeded anyway, we might be able to get their foreclosure complaint thrown out.

How a Lawyer Can Help with Loan Modification in Allentown

You can change a mortgage agreement, provided all parties agree. If you are at risk of foreclosure in Allentown, our lawyers can help you modify your existing loan and see if your lender is open to negotiating a new arrangement that works for everyone involved.

If your financial situation requires a long-term solution, we could work towards a loan modification. Loan modification restructures your existing mortgage loan. For example, your lender could agree to a lower interest rate, additional years on the term of your mortgage, or forgiving a portion of the delinquency.

Ideally, a loan modification would put you in a position to afford your monthly payments while ensuring you pay your lender regularly. The application process is complex and requires you to submit many documents. Our attorneys understand the process necessary to have a loan modification approved.

Your lender may be more or less open to modifying your loan, depending on its current structure and what you currently owe. For example, if your lender would stand to benefit from foreclosing on your property and reselling it, they might opt for that route and proceed with foreclosure.

Even during foreclosure proceedings, our lawyers can negotiate with your lender to see if they will reconsider loan modification. Furthermore, if you have additional debts outside mortgage debt, we can address them to make repaying your bank easier. For example, we can get dischargeable debts erased during bankruptcy, so you do not have as much of a financial burden.

What if You Do Not Stop Mortgage Foreclosure in Allentown?

If you do not stop mortgage foreclosure by defending your case or filing for bankruptcy, your lender can seize your home and sell it to someone else entirely in Allentown.

When homeowners cannot cure their mortgages or otherwise stop foreclosure, a sheriff’s sale will follow. You will be informed of this sale at least 30 days before it happens. The home will be sold to the highest bidder at the sheriff’s sale. If the lender is the highest bidder and bids less than you owe, it can still get a deficiency judgment against you. If someone else is the highest bidder and bids more than what you owe, you might get excess profits from the sale, if there are any.

Pennsylvania does not have a right-of-redemption period following sheriff’s sales of foreclosed properties. Before the sale, you can redeem your home only if you can pay what you owe, even if your house has already been foreclosed upon.