Stopping Foreclosure in Pennsylvania

If you are behind on your mortgage and facing the real possibility of losing your home, you need to know that Pennsylvania law provides several paths to stop or delay a foreclosure. The right approach depends on how far along the process has gone, your current income, and whether your financial difficulties are temporary or long-term.

Bryan P. Keenan has helped Pittsburgh homeowners stop foreclosures at every stage, from the first missed payment notice to the day before a scheduled sheriff's sale. Below is a practical overview of the tools available to you.

Option 1: Bankruptcy and the Automatic Stay

Filing a bankruptcy petition is the most powerful legal tool for stopping a foreclosure in progress. The automatic stay, a federal court order, takes effect the instant your petition is filed. It immediately prohibits your lender from taking any further action to foreclose on your property.

A Chapter 13 bankruptcy goes further by allowing you to cure the mortgage default over a three- to five-year repayment plan. During the plan, you make your regular mortgage payment directly to the lender and pay the arrears through the plan. At the end of the plan, you are fully caught up.

Why Chapter 13 Is the Strongest Option

• The automatic stay is guaranteed by federal law. Your lender cannot override it.
• You can cure years of missed payments over a manageable period.
• Other debts (credit cards, medical bills, personal loans) can be addressed in the same plan, freeing up income for mortgage payments.
• The court oversees the process, ensuring the lender follows the rules.
• You remain in your home throughout the plan.

Option 2: Loan Modification

A loan modification changes the terms of your existing mortgage to make payments more affordable. Modifications may include reducing the interest rate, extending the loan term from 30 to 40 years, adding missed payments to the loan balance, or in rare cases, reducing the principal balance.

Most lenders have loss mitigation departments that handle modification requests. You will need to submit a complete financial package including income documentation, bank statements, tax returns, and a hardship letter explaining why you fell behind.

The challenge with loan modifications is that they are voluntary on the lender's part. The bank can deny your request, take months to process it, or lose your paperwork multiple times. If a modification is denied or delayed, having a bankruptcy filing as a backup ensures the foreclosure cannot proceed while you pursue other options.

Option 3: Forbearance Agreement

A forbearance agreement is a temporary arrangement where the lender agrees to reduce or pause your monthly payments for a set period, usually three to six months. Forbearance works well when the financial difficulty is short-term, such as a temporary layoff, medical recovery, or seasonal income drop.

At the end of the forbearance period, the missed payments must be addressed. The lender may offer a repayment plan, a modification, or require a lump sum. Make sure you understand the exit terms before agreeing to forbearance.

Option 4: Repayment Plan with the Lender

Some lenders will agree to a repayment plan where you make your normal monthly payment plus an additional amount to catch up on arrears over 6 to 12 months. This works if you are only a few months behind and your income has stabilized enough to handle the higher payment.

Repayment plans are negotiated directly with the lender or servicer and do not involve the court. They can be effective for small arrears amounts but become impractical when you owe many months of missed payments.

Option 5: Pennsylvania's Act 91 and Conciliation Programs

Pennsylvania's Act 91 requires mortgage lenders to provide homeowners with notice of available assistance programs before filing a foreclosure complaint. The notice includes information about the Homeowner's Emergency Mortgage Assistance Program (HEMAP), which provides temporary loans to eligible homeowners.

Allegheny County also operates a Residential Mortgage Foreclosure Diversion Program that requires lenders and homeowners to participate in a conciliation conference before the court enters a foreclosure judgment. This conference provides a structured opportunity to negotiate alternatives to foreclosure with a housing counselor present.

The Foreclosure Timeline and Your Windows of Opportunity

• Months 1-3 of default: Best time to contact your lender about modification or forbearance. Also a good time to consult a bankruptcy attorney to understand all options.
• Act 91 notice received: Connect with a HUD-approved housing counselor. Explore HEMAP eligibility. Continue discussions with lender.
• Foreclosure complaint filed: You have 20 days to respond. This is when legal representation becomes critical. Bankruptcy can still be filed at any point.
• Conciliation conference: Attend with your attorney or housing counselor. Negotiate in good faith.
• Judgment entered: The window is narrowing but bankruptcy can still stop the process before the sale.
• Sheriff's sale scheduled: Emergency bankruptcy filing can halt the sale even at the last moment, though earlier filing allows better preparation.

What to Do Right Now

If you are reading this page, you are likely dealing with a foreclosure situation or worried that one is coming. Here is what I recommend:

1. Gather your mortgage documents: Your most recent mortgage statement, any notices from the lender, and the original loan documents if available.
2. Collect income records: Recent pay stubs, tax returns, and bank statements.
3. Call our office: The consultation is free and confidential. We will review your situation, explain your options, and give you an honest recommendation.

The worst thing you can do is nothing. Every day that passes without action is a day closer to the sheriff's sale. Call Bryan P. Keenan at 412-923-4941 or request a consultation online. Learn more about the full foreclosure process in Pennsylvania and how Chapter 13 provides lasting protection.

Frequently Asked Questions