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Radnor, PA Mortgage Foreclosure Defense Lawyer

Many Americans dream of homeownership, but this dream can quickly turn into a nightmare when creditors initiate a mortgage foreclosure. This may happen when homeowners fall too far behind on mortgage payments, and creditors seize the home. If you are in foreclosure or believe you will be soon, contact an attorney to discuss how to prevent the foreclosure or minimize the fallout.

In many cases, mortgage foreclosure can be avoided simply by communication with creditors or lenders. We might negotiate a deal where you pay a chunk of money upfront, and they agree to hold off on foreclosure proceedings. Instead, You might cut your losses and sell your home before creditors can foreclose. Another option is to file for bankruptcy. This might seem like a counterproductive idea, but bankruptcy might buy you the time you need to get your finances in order so you can keep your house.

Get started with a free case review from our mortgage foreclosure defense attorneys at Young, Marr, Mallis & Associates by calling our offices at (215) 701-6519.

What is Mortgage Foreclosure and When Does it Occur in Radnor, PA?

When people buy a home, they usually have to get a loan from the bank or some other creditor or lender. Typically, the home is collateral on the loan, meaning that if the homeowner fails to make timely payments on their mortgage, the bank can foreclose, seize the home, and sell it.

According to federal law 12 C.F.R. § 1024.41(f), a bank cannot start a mortgage foreclosure until the homeowner is more than 120 days delinquent. Banks must be very transparent about initiating foreclosure proceedings, as they should send you notices about late payments before they foreclose. Our Radnor, PA mortgage foreclosure defense attorneys will challenge the foreclosure if you did not receive notice or it is too early for the bank to begin foreclosure proceedings.

Many people go through foreclosure because they were laid off from work and could not find another job. Others encounter unexpected costs, such as sudden medical expenses, that consume their income and savings. Being late on one or two payments is not too unusual, but you should contact a lawyer if you cannot keep up with your mortgage.

How to Avoid Mortgage Foreclosure in Radnor, PA

If you have received notices about an impending mortgage foreclosure, or your financial situation has worsened and you might soon fall behind on mortgage payments, talk to your lawyer about ways to avoid foreclosure. Depending on your financial situation and how far behind you are on mortgage payments, it may be possible to avoid foreclosure altogether.

Curing the Default

One method to avoid foreclosure is to cure the default. This is often a challenging feat to accomplish, as it requires a lot of money upfront, which is something most people facing foreclosure do not have. Even so, under Pennsylvania law 41 Pa. Sta. § 404(a), borrowers in default have a legal right to cure the default up until 1 hour before their home is auctioned off at a sheriff’s sale.

Under § 404(b), a default may be cured when a borrower pays all the money that would have been due on the mortgage in the absence of a default. You may also have to pay certain legal fees that come with the foreclosure proceedings incurred by the bank. Additionally, you must also pay late penalties you might have racked up. This can be a lot of money and is not always possible. However, if you expect a large sum of money to come your way soon for any reason, talk to your lawyer about curing the default.

Negotiating with Lenders and Creditors

It might also be possible to ask the bank to hold off on the foreclosure even though they can legally initiate foreclosure proceedings. Now, the bank is unlikely to do this just because we ask nicely. We need to show them there is a good reason to hold back on mortgage foreclosure.

The bank might accept a large partial payment and agree to hold off on foreclosure proceedings while you come up with the rest of the money. For example, suppose you owe $10,000 in delinquent mortgage payments. Next, suppose you have about $5,000 right now you can pay. The bank might agree to take the $5,000 and hold off on foreclosure in the hopes that you can come up with the rest of the money shortly. At the end of the day, banks usually just want to get paid.

How Bankruptcy Can Help You Prevent Mortgage Foreclosure in Radnor, PA

One option that many homeowners are hesitant to explore is filing for bankruptcy. You might think filing for bankruptcy cannot possibly be a solution to a mortgage foreclosure, but it can help you in some surprising ways.

Automatic Stay

When the court accepts your bankruptcy petition, an automatic stay is imposed. The automatic stay, according to 11 U.S.C. § 362(a), essentially halts all legal action against you related to debts and your mortgage. In short, the bank cannot foreclose during an automatic stay, and you may have more time to get your finances in order. Depending on how you file for bankruptcy, you might avoid foreclosure or at least minimize the fallout.

Chapter 7 Bankruptcy

A very popular bankruptcy option is Chapter 7 bankruptcy. This is often called liquidation bankruptcy, as the focus is on liquidating accounts, assets, and property to pay debts. Under 11 U.S.C. § 726(a), assets must be distributed according to how certain loans and debts are prioritized. Unfortunately, a petitioner’s home is often one of the first assets to be liquidated.

Even so, if you have many other valuable properties or assets, we might persuade the bankruptcy trustee to sell those first in the hopes that you can keep your house. You might also take advantage of the federal homestead exemption that allows you to exempt a certain amount of equity in your home from the bankruptcy process.

Under § 727(a), the court may discharge debts so that you are no longer liable for paying them. Not all debts may be eligible for discharge, though, and your attorney can determine which of your debts may be discharged by the court.

Chapter 13 Bankruptcy

When you file for bankruptcy under Chapter 13, there is no liquidation of assets to worry about. Instead, you and your attorney must devise an aggressive yet feasible payment plan and stick to that plan for several years. Many people filing for Chapter 13 have to live by their payment plans for about 3 to 5 years.

According to § 1322(a), the plan should provide for the full payment of debts, including your mortgage, unless creditors agree to something different. The plan should also account for the payment of debts based on their priority. The plan may be subject to approval by the court and creditors.