How to Stop Foreclosure in Pennsylvania
When you miss two or more mortgage payments your loan is considered in default. Once this happens, your lender can pursue a foreclosure. There are a number of ways a homeowner can avoid a foreclosure. Available forms of loss mitigation include: loan modification, short refinance, short sale and deed-in-lieu of foreclosure. Because of the dramatic increase in foreclosures, many states create laws and programs to help homeowners stay in their homes. Pennsylvania has five programs designed to help homeowners maintain possession of their home.
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Instructions
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Contact the Pennsylvania Housing Finance Agency’s (PHFA) Foreclosure Mitigation Counseling Initiative. The Foreclosure Mitigation Counseling Initiative was established to provide homeowners free financial counseling to find a long-term solution to preventing the house from going into foreclosure. They will analyze the homeowner’s financial situation, as well as the current value of the property in question.
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Look into the Homeowners’ Emergency Mortgage Assistance Program’s (HEMAP) non-continuing mortgage assistance loan. This loan is provided by the state and is ideal for homeowners who are able to make their current payments, but can not catch up on back payments still owed. The loan would have to be repaid with a minimum payment from $25 per month up to 40% of the homeowner’s gross income.
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Apply for a HEMAP continuing loan. A continuing loan is for homeowners who have a back owed amount, and are unable to make their current payments at the present time. This is a loan, which must be repaid. It is limited to a maximum of 24 months and $60,000.
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Ask your foreclosure mitigation counselor about the Refinance to an Affordable Loan Program (REAL). The REAL program offers 100% financing with flexible qualifications to homeowners looking to convert their adjustable-rate mortgage into a 30 year fixed-rate mortgage. To qualify for the REAL program, applicants cannot make more than $120,000 annually and can be no more than 59 days past due on their mortgage.
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Pursue the Homeowner’s Equity Recovery Opportunity Loan Program (HERO). The HERO Program is designed for homeowners who do not qualify for the REAL Program. The HERO Program allows 100% financing, and provides a 30-year fixed-rate mortgage with a reasonable interest rate. With HERO the PHFA actually buys your mortgage from your current lender and then establishes an affordable repayment plan for the homeowner.
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Tips & Warnings
The best way to avoid foreclosure is to research different types of mortgages prior to the purchase and buy a house you can afford.
Although Pennsylvania offers a variety of ways for homeowners to avoid foreclosure, the homeowner needs to take the initiative and not wait too long to seek help.
