In Pennsylvania, many counties have implemented foreclosure diversion programs and offer conciliation conferences to help borrowers find ways to avoid foreclosure.
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 a loan modification, repayment agreement, forbearance agreement, short sale, or deed in lieu of foreclosure.
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.
Some Pennsylvania counties have implemented foreclosure diversion (or conciliation) programs, which are basically foreclosure mediation programs.
To be eligible to participate in a foreclosure diversion program, the borrower must generally meet the following criteria:
The requirements and procedures vary widely between programs. For example, in some counties, it's mandatory for the lender and borrower to participate in the program. Other programs are opt-in, which means the borrower can choose to participate. Moreover, some counties don't 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.
In general, participating in a foreclosure diversion program will delay the foreclosure process. The length of the delay depends on the county.
To find out if your county has some type of foreclosure diversion program, check the official court and county websites. You can also ask a local foreclosure attorney if your county offers this type of help.
Even though participating in one of Pennsylvania’s foreclosure diversion programs doesn't guarantee you'll avoid a foreclosure, it doesn't hurt to participate in the program. The lender might 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.