My ex-girlfriend and I took out a mortgage on my house in Pennsylvania while we were still together. We broke up and then I wasn’t able to cover the payments with just my paycheck. The house recently went into foreclosure. The sale hasn’t happened yet, and I just asked my parents for a loan. If the lender forecloses, can I buy the house back afterwards or should I try to work out a deal with the lender before the sale?
You should definitely try to work out a way to avoid foreclosure with the lender before the sale. In Pennsylvania, you don’t get the right to repurchase or “redeem” the home after the sale. (While some states have a law that allows foreclosed homeowners to repurchase their home following a foreclosure sale, there is no such law in Pennsylvania.)
To stop the sale, you can redeem the property before the foreclosure sale takes place by paying off the full amount of the mortgage debt. This is called the “equitable right of redemption.” (Learn more general information about the right of redemption.)
Alternatively, you might be able to find another way to avoid foreclosure by working out a mortgage modification, for example, or other arrangement with the lender. You must do this prior to the sale, otherwise you’ll lose the opportunity to save your home from foreclosure.
Pennsylvania foreclosures are judicial, which means the lender files a lawsuit in state court in order to foreclose the house. After the court enters a final judgment, the home is sold at a foreclosure sale. (To learn more about foreclosure laws and procedures in Pennsylvania, visit Nolo’s Pennsylvania Foreclosure Law Center.)
In a Pennsylvania foreclosure, you can redeem the home up until the foreclosure sale. After that, you’ll no longer have a right of redemption.
If you want to redeem the house before the sale, you must pay off the full amount of the mortgage loan, plus costs, fees, and interest.
To find out the procedure and the exact amount needed to redeem the house prior to the sale, call the foreclosing lender’s attorney. It may also be helpful to speak with a Pennsylvania attorney who can help you figure out the process.
You may also want to consider other options that may be available to you to save your home besides redeeming the home before the sale.
For example, you might be able to catch up on the past-due amounts and reinstate the mortgage. Under Pennsylvania law, you have up to one hour before the bidding at the foreclosure sale starts to reinstate the loan by paying the total amount of the unpaid monthly payments plus any late or other charges then due, as well as the reasonable attorney’s fees and costs connected with the foreclosure sale. (If you reinstate the loan, the mortgage will be restored to the same position as if no default had occurred.) However, you cannot do this more than three times in one year.
You can also ask your mortgage servicer (the company you make your payments to) if you can work out a deal that would allow you to stay in the property, such as a mortgage modification, forbearance agreement, or repayment plan.