Going through the foreclosure process is not something you want to do. However, if you find yourself in this position you need to know what you are up against.
When a mortgage lender loans you money to purchase a home, they fully expect you to pay it back based on the agreed upon terms. If you don’t, they are in position to repossess your home.
Five Stages of Foreclosure in Philadelphia
To fully understand the ins and outs of foreclosure in Philadelphia, you must focus on the following five stages of this process:
1. Missed Mortgage Payments
If you miss one mortgage payment your lender is not going to start the foreclosure process. When this becomes a habit and back payments begin to pile up, your lender will be forced to take action.
There may be times when an extenuating circumstance, such as a job loss, will result in a missed payment. Rather than hide from your lender, contact them in advance of missing the payment to let them know where you stand. You may be surprised to find they are willing to work with you.
2. Public Notice of Foreclosure
After several missed payments, your lender has no choice but to record a public notice of foreclosure in your home county.
This Notice of Default does not necessarily mean your home will be foreclosed on, but it should show you that the lender is serious about your situation.
Depending on your state, the lender may be required to post a Notice of Foreclosure on your front door.
As the name suggests, this is the step during which you are in position to work out a deal with the lender. Remember, your lender doesn’t want to foreclose on your home.
If you have any hopes of staying put or avoiding this financial disaster, you should touch base with your lender to discuss anything you can do to put an end to this process. From modifying your loan to a short sale, foreclosure is not your only option.
4. Home Auction
When the pre-foreclosure phase comes and goes without any agreement between you and the lender, your property will be auctioned off.
Note: if you live in a “right of redemption” state you have until the day your home is auctioned to negotiate with the lender as a means of keeping your home.
If your home is not purchased at auction, the lender then takes possession as the new owner. From there, they will attempt to sell the bank-owned property through a local real estate agent.
Although you should now have a sold grasp of the foreclosure process, there are other details to become familiar with if you find yourself in this position. Contact an attorney who can review your situation and help you take the right steps.