Pennsylvania Foreclosure Laws and Procedures
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Save your home from mortgage and tax foreclosure Resources to avoid losing your home through foreclosure in Philadelphia. Find AgentsIf you don't love your Clever partner agent, you can request to meet with another, or shake hands and go a different direction. We offer this because we're confident you're going to love working with a Clever Partner Agent. Foreclosure auctions in Pennsylvania are listed on the county sheriff's website, as well as auction.com and local newspapers. The author, Alex Long, has been investing in residential real estate since 2016 and has bought homes in various states across the U.S. during that time. If you decide to buy a foreclosure, we also recommend working with an experienced agent that can help you get the first crack at great opportunities and avoid money pits.
In Georgia, the homeowner gets a 30-day notice of delinquent property taxes. If the taxes aren’t paid within that 30-day period, the sheriff’s department can be ordered to seize and sell the property to cover the outstanding balance. This order triggers another 20-day notice period, an obligation to advertise the sale for four consecutive weeks, and an additional written notice to the owner. If no bids are sufficient to cover the outstanding tax debt, including accrued interest and costs, the county may purchase the property itself.
Pennsylvania foreclosure laws for buyers
It may be as simple as making a request to the local taxing authority. In other cases, judicial foreclosure proceedings may be required. In most states, the property owner has a right of redemption. That means there is a period of time that the homeowner can clear the tax lien.
We recommend buyers who are in a hurry focus on pre-foreclosures, as those are more likely to close quickly and allow for conventional financing. Due to the Protecting Tenants at Foreclosure Act, investors who buy properties with tenants in place must honor the original lease. Anyone who intends to live in the home must give the current tenants at least 90 days to vacate the property.
Foreclosure & sheriff sales
If the court grants summary judgment for the lender—or you lose at trial—the judge will enter a judgment and order your home sold at auction. A judicial foreclosure begins when the lender files a lawsuit asking a court for an order allowing a foreclosure sale. The lender gives notice of the suit by serving you a summons and complaint. If you don't respond to the suit, the lender will ask the court for, and probably receive, a default judgment, which will allow it to hold a foreclosure sale.
Alternatively, the property owner and any lienholders may claim excess proceeds of the sale. In theory, a tax deed sale works the same way in many states. The only difference is that the tax lien holder gets first priority, even before the mortgage lender. For example, say there’s a $5,000 tax lien on the property described above.
How Can I Stop a Foreclosure in Pennsylvania?
Under Pennsylvania state law, Pennsylvania National Guard members on active state service and 30 days after that are exempt from civil process. A few potential ways to stop a foreclosure include reinstating the loan, redeeming the property before the sale, or filing for bankruptcy. Of course, if you're able to work out a loss mitigation option, like a loan modification, that will also stop a foreclosure.
Generally, once the lender gets a deficiency judgment, the lender may collect this amount—in our example, $50,000—from the borrower. While there are some common threads, the actual procedure for a tax lien transfer varies significantly from state to state. A tax lien gets “super priority,” and if the homeowner doesn’t pay the property taxes in the time allowed, ownership of the property is simply transferred to the municipality. If the property owner can’t clear the lien within the redemption period, the process moves forward. In some states, the deed to the property is automatically transferred to the lien purchaser when the redemption period expires.
When buying a foreclosure in Pennsylvania, it is extremely important that you protect yourself from additional risk. Getting the property inspected and conducting a title search are two of the most effective ways to do that, as they'll protect you from most legal and physical issues. Pennsylvania law requires that all home inspections be conducted by a member of the National Home Inspection Association. It's also possible your agent will have a relationship with REO departments of local lenders or other entities who deal with foreclosed homes.
For government-owned foreclosures, you can look on the HUD home store. Buying a foreclosed home in Pennsylvania can be a complicated process. That's why hiring an agent with experience with foreclosures can make all the difference. They help you navigate the additional risks, effectively negotiate with motivated and distressed sellers, and avoid missing important deadlines. A foreclosure auction takes place when the property has officially been foreclosed on and the lender or government tries to sell the property at an auction to recoup the money they're owed. If the minimum bid is reached, the winning bidder gets a tax lien certificate.
Having the inside track could mean being the first person able to put in an offer on a property with great potential. Fortunately, Clever Real Estate can connect you with a local agent with expertise in buying foreclosures in Pennsylvania. Not all agents have experience with foreclosures, so this gives you a huge one-up on the competition. Plus, you can also earn a cash-back bonus when you purchase a qualifying home. Buying a foreclosed home in Pennsylvania could be a great opportunity, especially for flippers looking to cash in on increasing home prices.
In Pennsylvania, the pre-foreclosure process cannot begin until the borrower has missed at least 120 consecutive days of payments. During that time, the lender must call the homeowner to notify them of delinquency and offer them options to get caught up. After an additional 45 days of missed payments, the lender must also send a letter to the homeowner to the same effect. The foreclosure process begins only if the borrower fails to respond or meet the lender's proposed conditions. This means the property owner has three years to pay past-due amounts, interest, and other fees. If property taxes are delinquent in subsequent years, the lienholder can pay them and have the amount added to the lien certificate.
That said, you need to know what you're doing, as there are many pitfalls and rules that come with buying foreclosures. One way to stop a foreclosure is by "redeeming" the property. To redeem, you have to pay off the full amount of the loan before the foreclosure sale. The Pennsylvania Supreme Court ruled in the case of JPMorgan Chase Bank N.A. Clever always tries to provide the most up-to-date, accurate, and useful information available for our readers.
Talk to a Clever agent today to see what they can do to help you navigate the foreclosure process and find your dream home. Clever can connect you with one of the top real estate agents in your area, plus put cash back in your pocket. If you're looking for federal laws, you might want to visit the Library of Congress's legal research website, which provides links to federal regulations and federal statutes. In this article, you'll find details on foreclosure laws in Pennsylvania, with citations to statutes so you can learn more. Also, many Pennsylvania mortgages allow the lender (or the current loan holder, referred to as the "lender" in this article) to take necessary steps to protect its interest in the property. Property inspections are performed to ensure that the home is occupied and appropriately maintained.
The first step is to find a great local realtor who specializes in foreclosure purchases. Our free service connects buyers like you with top-rated agents from trusted brands like Coldwell Banker and Century 21. 🚨 We strongly encourage you to proceed carefully if you want to buy foreclosures at an auction. You should consider attending a couple of auctions in person without bidding first to familiarize yourself with the process before submitting bids if this is something you're serious about pursuing. Since you probably won't have traditional financing, pre-approval letters won't be a concern. However, you will need to submit bids according to the auction rules and be prepared to pay within the required timeframe — usually 10 days after the auction.
Auctions can be held in-person or online, though online auctions are becoming increasingly popular. Many of the major cities in Pennsylvania are historic cities. This is great for visiting tourists, but it also means a lot of the homes can be quite old, and old homes usually mean more problems. The fact that foreclosures are often neglected only increases the potential headache with old homes.
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