Understanding the foreclosure process in Pittsburgh, Pennsylvania

When you obtain a loan to buy a home in Pittsburgh, Pennsylvania, you typically sign two key documents: a mortgage and a promissory note.

The mortgage gives the lender a security interest in your property, while the promissory note is your commitment to repay the loan on time.

If you fail to make payments as agreed in the mortgage, this allows the lender to sell your home to recover the loan amount.

Foreclosure is the legal procedure by which the lender takes possession of your home and sells it.

How long does the foreclosure process take?

There are specific procedures lenders must follow to foreclose on a mortgage if you fall behind on payments. In Pittsburgh, there is no set timeline for foreclosure, but depending on your situation and whether or not it is contested, it can take anywhere from several months to over a year. This process generally involves four main stages, each with varying durations. Let’s look at each one:

Pre-foreclosure

Pre-foreclosure is commonly the time between the first missed mortgage payment and the official start of the foreclosure process. It is important to know that during this period, several events occur that may allow you to resolve missed payments, including:

The lender offers a grace period. You have between 10 and 15 days to make the missed payment before monthly interest is charged on those arrears.

Review your promissory note or mortgage statement to see the charges for late payments.

The lender must contact you. Federal regulations require the lender to call you within 36 days of a missed payment to discuss options such as mortgage modification, payment plans, or a short sale.

The lender must also notify you in writing about loss mitigation options within 45 days of a missed payment and connect you with a team member to help prevent foreclosure.

After 90 days, the lender sends you a notice under Act 91, indicating their intent to foreclose and providing information about state assistance programs.

The foreclosure process begins if you are more than 120 days behind on payments.

With rising home prices, if you have equity, you might consider selling to avoid foreclosure, freeing yourself from the mortgage and gaining some needed funds for financial recovery.

A conciliation conference or a meeting with your lender to find a way to resume payments can also help delay or prevent foreclosure. Outcomes may include a payment plan, a loan modification, or a deed in lieu of foreclosure. Most counties in Pennsylvania offer a foreclosure diversion program to schedule such meetings.

Start of judicial foreclosure

Once your mortgage is 120 days delinquent, the lender files a lawsuit to obtain a judgment to sell your home.

Before filing the lawsuit, they must send you a notice of intent to foreclose 30 days in advance. After filing the lawsuit, you are served with court documents.

You have 30 days to contest the foreclosure or file counterclaims. If you do not respond, the lender requests a default judgment to proceed with the foreclosure sale.

If you choose to contest the case, it goes to trial, and the lender may request a summary judgment, asking the judge to rule in their favor due to your mortgage default.

If the lender wins, the judge allows your home to be auctioned off.

Property auction

After the court’s approval, the lender decides when to sell your home, but they must:

Post a foreclosure sale notice on your property at least 30 days before the sale.

Notify you of the sale at least 30 days in advance.

Publish the sale notice weekly for three weeks in a local newspaper, starting at least 21 days before the sale.

In Pittsburgh and Pennsylvania, you can reinstate your mortgage to stop a foreclosure sale up to one hour before the auction by paying all missed payments, interest, and costs.

The lender sets the auction’s opening price based on the mortgage balance, taxes, liens, and other costs. The property goes to the highest bidder.

If the lender does not sell the property for the necessary amount, it becomes “bank-owned” or “real estate owned (REO).” The lender then tries to sell it at market prices through an agent or online listing.

If a buyer offers more than you owe, you are entitled to the excess cash from the sale. If the sale proceeds do not cover your debt, the lender may sue you for the difference within the next six months.

Eviction due to foreclosure

You can remain in your home until it is sold at a foreclosure sale or as REO.

If you do not voluntarily vacate the property after the sale, you will receive an eviction notice. The local sheriff will enforce the eviction order if you do not comply.

If you rented the property, tenants with a lease agreement will receive at least 90 days’ notice, although the new owner may decide to let them stay until the end of the lease term.

Foreclosures Available:

• Pittsburgh: 150 foreclosures available