In response to the ongoing foreclosure crisis in this country, many states have implemented foreclosure diversion programs to assist borrowers in finding ways to avoid foreclosure. In Pennsylvania, certain counties have implemented such programs and made conciliation conferences available to homeowners facing foreclosure. Read on to learn more about which counties have foreclosure diversion programs, how the programs work, and how you can benefit from the process.
(To learn about other options for dealing with foreclosure, visit Nolo's Foreclosure section.)
What is a Foreclosure Conciliation Conference?
A conciliation conference is a face-to-face meeting between the lender and the borrower to reach a workout and avoid foreclosure. Potential outcomes of a conciliation conference include:
- loan modification
- repayment agreement
- forbearance agreement
- short sale, or
- deed in lieu of foreclosure.
(To get information about each of these options, see our Alternatives to Foreclosure area.)
How Foreclosures Work in Pennsylvania
In Pennsylvania, foreclosures are judicial, which means the lender must foreclose through the state court system. The lender initiates the foreclosure by filing a complaint and having it served on the borrower, along with a summons to appear in court. To learn more about the difference between judicial and nonjudicial foreclosure, and the procedures for each, see our Judicial v. Nonjudicial Foreclosure topic area.
To learn about the specific foreclosure laws in Pennsylvania, see our Summary of Pennsylvania’s Foreclosure Laws.
Pennsylvania Foreclosure Mediation
Pennsylvania does not have a statewide foreclosure mediation or diversion program. However, some Pennsylvania counties have implemented foreclosure diversion (or conciliation) programs.
Eligibility for Foreclosure Diversion
In order to be eligible to participate in a foreclosure diversion program, the borrower must generally meet the following criteria:
- the lender filed a complaint for mortgage foreclosure
- the property is owner-occupied, and
- the property consists of four or fewer units.
How Pennsylvania’s Foreclosure Diversion Programs Work
The requirements and procedures vary widely between programs. For example, it is mandatory for the lender and borrower to participate in the program in some counties, while other programs are opt-in (meaning the borrower can choose to participate).
Moreover, some counties do not have mediation meetings but rather give the borrower the ability to postpone (or stay) the foreclosure for up to 90 days to provide time to work directly with the lender to avoid foreclosure.
How Conciliation Affects the Foreclosure Lawsuit
In general, participating in a foreclosure diversion program will delay the foreclosure process. The length of the delay depends on the county.
Pennsylvania Counties with Foreclosure Diversion Programs
The following Pennsylvania counties have some type of foreclosure diversion program.
Borrowers who are in foreclosure may opt into the program by calling the Allegheny County Department of Economic Development’s “Save Your Home Hotline” at 866-298-8020. Go to www.alleghenycourts.us for more information. Choose “civil” and “Mortgage Foreclosure Program”.
The homeowner will be notified of the opportunity to participate in a foreclosure diversion program when the complaint is served. Homeowners must respond within 10 days. The program is limited to owner-occupied residential property. For more information, call 610-372-8433 or go to www.co.berks.pa.us/Dept/Courts/Pages/MortgageForeclosureDiversionProgram.aspx.
Borrowers may opt into the program, which triggers a stay of all proceedings while conciliation takes place.
Borrowers can request a conciliation conference. Go to www.buckscounty.org and click on “Online Services” and Mortgage Foreclosure Diversion Program for more information.
Borrowers can call a hotline, speak to a housing counselor, and request a conciliation conference. For more information, go to www.pabulletin.com/secure/data/vol39/39-40/1829.html.
Homeowners will receive a Notice of Residential Mortgage Foreclosure Diversion Program along with the foreclosure complaint. Following the service of the complaint and notice, all proceedings are stayed for 60 days from the date of service of the complaint to provide time for the homeowner to qualify for participation in conciliation conference. For more information, go to www.pabulletin.com/secure/data/vol42/42-13/578.html. You can also call 712-243-9400 ext. 2510 or 800-822-5288 ext. 2510. The program is scheduled to remain in effect until June 30, 2014.
Borrowers may participate in a conference with a housing counselor and obtain a 30-day stay of foreclosure. The purpose of the stay is to give the borrowers time to work with the lender to find a way to avoid foreclosure. For more information, go to www.co.delaware.pa.us/sheriff/realestate.html and click on “Administrative Order and Notice of Foreclosure Program.”
Borrowers may seek a 90-day stay in the mortgage foreclosure proceedings for the purpose of reaching a mutually acceptable agreement with the lender to resolve the case. For more information, go to www.pabulletin.com/secure/data/vol40/40-14/583.html.
Borrowers may opt into the program by contacting a housing counselor and filing a request for a conciliation conference. For more information, go to www.pabulletin.com/secure/data/vol39/39-24/1055.html.
The court will schedule a conciliation/case management conference in every eligible case upon the filing of the complaint for foreclosure. For more information, go to www.lccpa.org/rules.nex and click on “Mortgage Foreclosure Conciliation Program.”
Eligible applicants will be notified that they may participate in the court diversionary program or mediation by the court administrator. The homeowner must call a credit counseling agency (identified in the notice) within 30 days to opt in to the program.
Borrowers may opt in to the program by filing an election to participate with the court.
When borrowers file a written request for a conciliation conference under this program, an order will be entered that refers the matter to a conciliation conference. For more information, go to www.pabulletin.com/secure/data/vol42/42-18/802.html.
Conciliation conferences are scheduled in all owner-occupied residential foreclosure cases. You can contact Northampton's Save Your Home Hotline at 800-755-1563 or 610-691-2876.
Conciliation conferences are scheduled in all owner-occupied residential foreclosure cases. Go to www.phila.gov and run a search for “Foreclosure Diversion Program” for more information.
To be eligible to request a court-supervised conciliation conference, the borrowers must contact a housing counselor and schedule an appointment. For more information, go to www.pabulletin.com/secure/data/vol41/41-47/1989.html.
If the borrowers call a hotline and attend a counseling session, they may seek a 60-day stay in the mortgage foreclosure proceedings to give them time to negotiate with the lender and find a way to avoid foreclosure. For more information, go to www.pabulletin.com/secure/data/vol40/40-13/549.html.
If the borrowers call a hotline and attend a counseling session, they can obtain a stay in the foreclosure proceedings to give them time to negotiate with the lender and find a way to avoid foreclosure.
More and more counties are adding conciliation programs so check your local rules to see if there is one in your county.
Should You Participate in the Foreclosure Mediation Program in Your County?
Even though participating in one of Pennsylvania’s foreclosure diversion programs does not guarantee that a foreclosure will be avoided, it doesn't hurt to participate in the program. The lender may be more likely to agree to a nonforeclosure solution during mediation than if you approach it outside of the program. Or you might qualify for a loss mitigation option that you hadn’t previously considered.