Sheriff Sale - How to Delay It

A Pennsylvania Sheriff’s Sale can be delayed, also known as stayed, either at the request of the lender or upon a stay granted by a judge.  The Sheriff’s Sale can be delayed up to one hour before the bidding at a foreclosure sale.

Common Technique

The common technique to delay a Sheriff’s Sale is to convince the foreclosing mortgage lender to request it.  In many cases, though not all, a lender will delay a Sheriff’s Sale to allow a short sale to reach settlement.

Sometimes a lender will only initiate their request to stay the Sheriff’s Sale a mere two to three days before the sale date.  The bank does this just in case the short sale transaction is not working out to their satisfaction, so they can quickly go ahead with the foreclosure sale if necessary.  The risk to sellers and agents is that if the left hand does not know what the right hand is doing, the Sheriff’s auctioneer might not receive the message to delay the sale.  Unfortunately, we have seen this happen on several occasions.

Once the Sheriff’s Sale occurs, it is final.  There is no right of redemption in Pennsylvania like there is in some other states.

Another Method

Another method of delaying a Sheriff’s Sale is for the borrower to declare bankruptcy.  A bankruptcy will postpone the foreclosure sale until the trustee or presiding judge releases the real estate from the bankruptcy proceeding.  We have seen borrowers declare bankruptcy a mere hour before a Sheriff’s Sale.  In those cases, they have been able to delay the foreclosure action for months while the bankruptcy runs its course.

One Other Method

One other technique to delay a Sheriff’s Sale is for the borrower or their representative to convince a judge to grant a stay.  Sometimes a judge will delay a Sheriff’s Sale to allow for a possible conciliation.  We have seen various judges grant stays from 30 days to six months.  The borrower may file a petition seeking relief from the judgment or a delay of the Sheriff’s Sale.  Rule 2965 of the Pennsylvania Code states that the petition must be filed within 30 days after the date the Default Judgment is served to the borrower or they may lose their rights to file.  We have seen some cases where a petition filed more than 30 days later was considered valid enough to convince a judge to postpone the Sheriff’s Sale.

In rare cases, the Sheriff’s department will postpone a foreclosure sale due to a high volume of cases.

Foreclosure can be avoided. Short Selling your home has far less consequences than a foreclosure sale. We do Short Sales... We provide you with an attorney at no cost to you. Our processors and negotiators deal with your lenders in reaching a satisfactory deal to close the sale. Don't wait!! If you or someone you know is having problems paying their mortgage, call me today to find out how our team of professionals can help you sell your home and move on with your life.

From the Blog "Stop My Foreclosure Instantly"  Reprinted with permission. 

Can I Go To Jail for Not Paying My Mortgage?

Not likely... but....

A borrower will not go to jail if they default on their mortgage loan, but they could face criminal charges in a couple of extreme situations described below.

In some states, foreclosure involves judicial proceedings.  In other words, the lender must hire an attorney who initiates a foreclosure lawsuit against the borrower.  The lawsuit does not involve any criminal charges against the borrower.  It is merely a civil proceeding that involves the lender’s attempt to collect a debt or be given ownership of the property in exchange for the unpaid debt obligation.

 If a borrower fails to maintain their property prior to being foreclosed, the local municipality could issue a citation and/or a fine.  Common citations include failure to keep grass cut, leaving pets behind, having an unfenced or tepid swimming pool, or leaving a house unsecured.  Some municipalities will even condemn a property.  If the borrower fails to address the issues and pay the fines, some municipalities have the ability to take the borrower to court.  In rare cases, failure to show up for court could result in an arrest warrant being issued.

If a borrower deliberately trashes a house, it is possible for the lender to sue them after the sale for destruction of property and perhaps even press criminal charges.  While rare, it is done in cases where the borrower creates major damage to the house.  We have seen cases of angry borrowers clogging toilets and sinks with concrete mix or stopping the drains with other things like tennis balls.  They then turn the water on and leave it on.  In other cases, borrowers have ripped out all the fixtures and appliances.

In some blighted cities, lenders have taken the unusual step of not foreclosing since they determine that the property’s value is so low that it is better to not take it back.  This is known as a bank walkaway, where the bank charges off the loan and stops the foreclosure action.  Therefore, the borrower remains as the owner.  The city can then issue citations against the owner for failure to maintain their property.  In some cases we have seen, the owner walked away from the property only to find out years later that they still owned the property.  The city may even have the right to demolish the property and bill the owner for the cost.  In rare cases, failure to respond to the city’s citations or court hearings could result in an arrest warrant being issued.

The key is for homeowners facing a hardship and unable to pay their mortgages to Short Sale their home and avoid foreclosure all together. If you or someone you know is in this situation, contact me to learn how our team of professionals can help! We provide you with an attorney at no cost to you and a processor/negotiator to communicate and work with the lender.

From the Blog: StopMyForeclosureInstantly. Reprinted with permission.

Hardship - What Qualifies to be Eligible for a Short Sale?

I want to do a short sale and the bank says I need to display a hardship.  What counts as a hardship?

A hardship is a situation that renders a borrower unable to continue making monthly mortgage payments and/or unable to sell their property and cover the entire mortgage balance.

What are Legitimate Hardships?

Legitimate hardships include:

- The death of a breadwinner.

- Serious illness of a breadwinner.

- Serious illness of a family member, whereby the income earner(s) in a family take time off work to        care for the person.

- Serious damage to or a material defect with the property that will not be covered by insurance.

- Loss of a job.

- Reduced hours at work, which lowers a person’s take-home pay.

- Loss of a job by one of the two people in a dual-income household.

- A forced job relocation, typically more than 100 miles away.

- A divorce, typically one that involves a sharp decline in income and/or significant reduction in liquid assets.

What Situations Do Not Qualify as Hardships?

Situations that are not hardships include:

- Desire not to pay, even though the borrower has substantial income or assets.

- Decline in property values (in some areas of the country, like California, Arizona, Florida, and Nevada, the decline is so sharp that it may qualify as a hardship).

- A break-up between a boyfriend and girlfriend who were both on the mortgage.

- A person who has substantial liquid assets and who therefore could easily pay the difference that is owed.

- Depression experienced by the borrower.

- A person who is angry at the bank and wants to stop paying to make a point.

If there is no hardship, then it is extremely unlikely that a short sale will be approved.

If you believe you are a candidate for a Short Sale, contact me to discuss how we can help you get through this difficult time and avoid foreclosure.

Reprinted from the website “Significa Short Sale Solutions” with permission.

Short Sale - What's My Tax Liability?

I am selling my house via a short sale.  Will I have to pay tax on the forgiven debt?

 Under the Mortgage Forgiveness Debt Relief Act of 2007, enacted December 20, 2007, taxpayers may exclude debt forgiven on their principal residence.  This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately).  Details are on Internal Revenue Service (IRS) Form 982 and its instructions, available on www.irs.gov.  Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, may qualify for this relief.  In most cases, eligible homeowners only need to fill out a few lines on IRS Form 982 (specifically, lines 1e, 2 and 10b).

What are some of the rules?

The debt must have been used to buy, build, or substantially improve the taxpayer’s principal residence and must have been secured by that residence.  Debt used to refinance qualifying debt is also eligible for the exclusion, but only up to the amount of the old mortgage principal, just before the refinancing.  Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for this tax-relief provision.  In some cases, however, other kinds of tax relief, based on insolvency, for example, may be available.

Will the government extend forgiveness?

It is possible that the federal government may extend the principal residence short sale tax forgiveness beyond December 31, 2012.  It is also possible that the government may not extend this provision.  The government needs tax revenues and 2012 is an election year, which may affect political decisions.  Given what we know now, people who are considering a short sale of their principal residence are better off if they sell their house in 2012.

Can the mortgage lender come after me?

Please be advised that your mortgage lender might not agree to forgive the mortgage deficiency. If they do not forgive the deficiency, they may legally pursue you personally to collect this debt.

Is a Short Sale right for you? Contact me to learn how our team of professionals can help you get through this difficult time and avoid foreclosure! 

From the Blog: Stop Foreclosure Right Now. Re-Printed with permission.

Who Knew? Banks CAN change the locks on your home BEFORE they foreclose!

Who changed my locks?

When a borrower becomes seriously delinquent on their mortgage, the bank will eventually send someone to the house to verify occupancy and perhaps assess the current market value.  If the bank’s representative, who may be a real estate agent, contractor, or other third party, deems that the property is abandoned, then the bank may change the locks and secure the premises even if the bank does not yet own it.  The bank might even winterize the property to defend against the possibility of water damage from frozen pipes in the winter.

Can I get the keys?

The fine print in most mortgage loan documents allows banks to secure a mortgaged property if their field representative sees that the property is vacant.  Even if the doors are locked, the bank may change the locks on an abandoned property.  Typically the bank will not tell the owner or listing agent that they’ve changed the locks.  However, the owner and listing agent have the right to request the new keys from the bank.  We have seen banks mail the keys or provide a lockbox combination upon request, although sometimes it will take several phone calls to obtain the keys.

What happens to my stuff?

If a mortgage lender changes the locks on a vacant house prior to foreclosing on the property, they will not remove any personal items.  In other words, the bank will not clean out the house before they foreclose.

What if I am still in the property?

If the bank’s representative sees that the house is occupied, then they will not change the locks until after a foreclosure sale.  A lot of homeowners facing foreclosure have an unfounded fear that the bank will lock them out of their home prior to a foreclosure auction.  If the home is occupied, then the mortgage lender will not change the locks, nor will they seize any personal property.

Should I let the bank know that I am still in the property?

If a person who is behind on their mortgage payments still lives in the property, it is wise for them to inform their bank that the house is occupied.  If the bank is notified that someone is living in the premises, then they may not send a field representative to the house.

You can avoid foreclosure via a Short Sale. The impact of a Short Sale is far less damaging to your credit and job opportunities. If you're experiencing a hardship and unable to make your mortgage payments, contact me to learn how we can help!

From the blog: Stop Foreclosure Right Now.  Reprinted with permission. 

Foreclosure Timeline in Pennsylvania

Foreclosure is a legal procedure in which property pledged as security is sold to satisfy the debt.  A mortgage lender’s rights can be enforced through foreclosure if the borrower defaults on mortgage payments or fails to fulfill any of the other obligations in the mortgage.  The foreclosure process in Pennsylvania begins when a borrower fails to make payments on a mortgage loan, or an owner fails to pay property taxes or water/sewer bills, or any other lien holder pursues its right to collect the debt secured by the property.

Sample Timeline for Foreclosure in Pennsylvania

August 1, 2011	August mortgage payment due but not paid
September 1, 2011	September mortgage payment also due.  Two months’ payments are now due.
October 1, 2011	October mortgage payment due.  Three months’ payments are now due.
October 6, 2011	Lis Pendens Notice.  Lender sends a Notice of Intent to Foreclosure (Act 6 Notice) to the borrower.  The lender may also send an Act 91. The homeowner has 20-30 days to respond.
November 9, 2011	The maximum 30 days in the Act 6 and Act 91 Notices are up.  The lender hires a foreclosure attorney.
December 9, 2011	The foreclosure attorney for the lender files a complaint at the county courthouse (Court of Common Pleas).
January 24, 2012	The borrower fails to respond to the complaint, and a default judgment is entered in favor of the lender.
February 26, 2012	The county Sheriff’s office schedules a date for the Sheriff’s Sale.
March 26, 2012	A notice of the Sheriff’s Sale is sent to the borrower and to other lien holders.
April 26, 2012	The Sheriff’s Sale is held.
April 28, 2012	The Sheriff’s office prepares and records a deed conveying title to the purchaser.  If a third party did not purchase the property at the Sheriff’s Sale, then the deed conveys title to the mortgage lender.
April 29, 2012	Eviction or Ejectment process begins if the borrower is still residing at the property.

 Typically the foreclosure process in Pennsylvania will take longer than the above diagram.  The lender may delay filing of a foreclosure lawsuit because they’re inundated or because they are attempting a workout with the borrower.  The borrower could delay the process with legal motions.  The judge in the county court may delay the foreclosure process to see if the borrower and lender’s attorney can reach a better solution.  The Sheriff’s Department may delay the sale because they’re overwhelmed.

From the Blog: Stop Foreclosure Right Now. Re-printed with permission.

Avoiding Foreclosure - Short Sale Solution may be Right for You!

Short Sales are all we do and we've been doing them since 2005 with over 300 successfully closed! Contact me today to learn how our team of professionals can help you.

1 out of Every 3 Homeowners are Underwater on their Mortgages!

Economy Watch at MSNBC recently reported that 1 out of every 3 mortgages are underwater. While, it goes on to say 90 percent of the owners are current in their payments, 10 percent are behind. Add this to the fact that foreclosures rose 9% in May from a month earlier and you have a picture that there is more trouble on the horizon for many families struggling day-to-day just to get by.

Many people that find themselves facing a hardship and owe more than their home is worth don't have to end up in foreclosure. A successful Short Sale of their home is a far better alternative on almost every level. Yet many homeowners will wait too long to ask for help or list their home with someone who isn't familiar with the Short Sale process only to have the sale rejected by the lender.

Significa does Short Sales... and they have been doing them since 2005 - over 300 Short Sales successfully closed. With our team of professionals, you have access to an Attorney, a Processor and a Negotiator. Our team knows how to represent you and get your home sold, avoiding foreclosure, so you can move on with your life.

Contact me today to learn how we can help you.

Articles referenced: 

One in Three Mortgage Holders Are Underwater


Foreclosure Activity Jumps in Troubling Sign for Housing Recovery

I’m behind on my mortgage. Should I move out or stay in the house?

In most cases, it is wiser for a homeowner to stay in their house.  Many people who are behind on their mortgage payments have an unfounded fear that they will come home one night to find their belongings removed and their door padlocked.

Banks prefer to have someone, particularly the homeowner, stay in the house.  Mortgage lenders do not like vacant houses, as they lose value due to break-ins, ice damage in the winter, or lack of upkeep.

A homeowner behind on their payments can save money by staying in their house.  Rather than paying for rent somewhere else, they can live rent-free in their house until the property is sold.  The money that is saved during this period can be allocated for moving costs, a security deposit, and rent when they eventually move elsewhere.

Even if the homeowner is delinquent with their mortgage, they are still the owner of record and therefore remain responsible for the property.  The owner could be cited by the local municipality for not maintaining the grounds, such as failure to cut the grass or shovel the snow off the sidewalk.  The owner is still responsible for paying property taxes.

The owner is also liable for what occurs on the property.  For example, if the owner abandons the property and has a pool, they could be liable if someone falls into the pool even if that person were trespassing.  The owner is also expected to maintain insurance on the property.  If they cannot afford insurance, they should inform their mortgage lender so the lender can pay for forced placed insurance.

Unless there is a compelling reason to move now, such as job relocation or a contentious divorce, it is wise for a homeowner to stay in the home while the foreclosure process unfolds.

From the blog: Stop Foreclosure Right Now – Reprinted with permission.

Avoiding a foreclosure by successfully processing a Short Sale of your home is what we do! We close 90% of our Short Sales. Contact me to see how our team of professionals can help you.

Short Sale? Don't Trust Listing and Selling Your Home with Just Anyone!

Read this before you have an attorney or just any Realtor list & process your short sale. See why Keller Williams Realty Lancaster teamed-up with Significa Corp is your best option for avoiding foreclosure & selling your home. Why would you go anywhere else? 

• Significa has 7 years’ experience in successfully closing short sales. 
• We specialize in processing short sales. It is our full time business. 
• We provide attorney services included in our short sale program at no cost to the homeowners.
• We have a staff of 18 dedicated and trained people servicing the customer.
• We successfully close 90% of our short sale transactions.
• We have documented systems and manuals in place for the short sale process.
• We offer personalized service and weekly updates to all parties in the transaction.
• We have a detailed S.O.P. (Standard Operating Procedures) and accountability for all of our roles in our short sale process.
• We offer a training program with certification and we are considered the leaders in our industry. We also offer a Continuing Education Course for agents.
• We use leading technology to process our short sales.
• We have extensive relationships with most lenders in the country and are able to escalate a file immediately We can by-pass the bureaucratic channels when necessary.
• We have processed and closed over 300 short sales.

Short Sales - helping you avoid foreclosure... it's what we do...it's all we do... Significa Corp. - Contact me today to learn more and see how our team of professionals can help you!

Will My Bank Allow Me to do a Short Sale If I’m Current on My Mortgage Payments?

This is one of the questions I get asked most frequently. Here is the answer.

Not all short sales involve sellers who are delinquent on their mortgage. Some banks will consider a short sale for a person who is current on their mortgage if there is a legitimate hardship and a documented decline in property values.

Some banks have a policy whereby they will only consider a short sale if the borrower is behind on their payments. This policy can be viewed as absurd, especially if property values have dropped dramatically in the area. On the other hand, why would a creditor want to consider taking less money when someone keeps paying them per their original loan agreement?

A technique used by some people who want to minimize their damage to their credit while also having a short sale approved is to deliberately pay their mortgage late, but no more than 29 days late. When a bank receives their mortgage payment 30 or more days late, they inform the credit bureaus. For someone who is looking to borrow money, especially via a mortgage loan, in the next two years, a single instance of being 30 days late can prevent them from obtaining the loan they desire.

A person could choose to not pay their mortgage on time, which after a few days (typically the 6th of the month or later) causes the bank to treat the loan differently than if it were paid on time. The bank may send the file to their loss mitigation department once the loan is delinquent. The bank will call the borrower, and may send mail, offering options and assistance. One of the options may be a short sale.

Of course, the technique to prevent a 30-day report to the credit bureaus involves the borrower paying their mortgage plus the late fee just before the end of the month. That way the loan never goes 30 days behind, but the bank starts offering options to the borrower. That action may trigger the bank to consider a short sale or loan modification.

Some banks unfortunately have the policy whereby the borrower must be at least three months behind before they’ll consider a short sale. If that’s the case, then the homeowner must make a decision whether they should stop paying the mortgage. In some cases, it may be the best option for a person to stop paying the mortgage. That is a decision that should be made only after consulting various professionals, such as an attorney, and weighing the pros and cons.

The first thing one should do is call their bank to express difficulty in paying the mortgage or selling the house. Many banks will mail a short sale package to the borrower if asked. Some banks will reveal their precise policy on how to qualify for a short sale, while other banks will provide nebulous answers.

If you are considering a Short Sale, contact me and let our team of professionals assist. We are here to help you and help keep you out of foreclosure!

Money After the Short Sale? Maybe.

In the vast majority of short sales, the seller does not receive any money.  The bank and perhaps some other creditors lose thousands of dollars, and so they will not permit the seller to receive any proceeds from the sale.

You may have to pay…

In some cases, the seller may be expected to pay some money at closing.  In most cases where the seller has to contribute something, the amount the seller pays is just to make up the difference on pro-rated taxes, a higher-than-expected water/sewer bill, or some other shortfall that appears at the last minute.  For example, if the mortgage lender agrees to take a minimum of $132,655.17 and the closing costs are a little higher than expected, the lender will likely be unwilling to take less than the precise amount they stated.  Therefore, the buyer, seller, real estate agents, or other parties must contribute in some way to make up the shortfall.  In some cases, the buyer will refuse to pay more, stating that they will not pay for the seller’s costs.  In such situations, the seller may have to bring some money to closing to cover extra closing costs.  Typically that amount would be fairly low, ranging from a few dollars to a couple thousand dollars.

You may even have to promise…

In some short sales, the mortgage lender may stipulate that the seller must contribute some amount of money or the lender may ask the seller to sign a promissory note to pay back some of the remaining debt.  The mortgage company must declare any such stipulations in their short sale approval letter, so the seller would know well in advance.  In most short sales these days, the mortgage company does not expect the seller to contribute any money as it may be apparent that the seller does not have any funds to give.

But, you may receive money…

In some short sales, the seller may be given some money at closing or upon post-settlement move-out.  The federal government’s Home Affordable Foreclosure Alternatives (HAFA) program provides $3,000.00 for eligible sellers.  Loans insured by the Federal Housing Administration (FHA) may grant $750.00 to $1,000.00 to the seller as a moving incentive.  Some mortgage lenders, like Bank of America and Chase Home Finance, offer to pay $3,000.00 up to $25,000.00 to sellers at closing if they cooperate with the short sale of their property.

The real benefit.

Sellers in a short sale should expect to receive no money at closing.  If they do qualify for a special short sale program, then they should be grateful to receive what little money they do.  The greater financial benefit to the seller is that they will no longer have to maintain a property they cannot afford.

For more information, contact me and see how our team of professionals can help!

Good News for Homeowners Underwater on their Mortgages

While not a done deal yet - the first step has been taken to extend the much needed Mortgage Debt Relief Act past the end of this year to 2015.

Extending the Mortgage Forgiveness Debt Relief Act?

Homeowners who qualify have not had to pay taxes on the debt forgiven by a lender in a short sale transaction. This Act is scheduled to expire at the end of the year and this would dramatically impact anyone that has to sell their home when the amount paid is less than what they owe on their mortgage.

As the attached article states; extension of this Act has been included in the budget. It's believed that both sides recognize the necessity of extending the Act to help millions of homeowners. We'll be watching this closely as it moves through the process and keeping you advised.

Contact me to learn more about how our team of professionals can help you if you find yourself in a short sale position.

Short Sale? Lancaster County has a New Solution with Keller Williams & Significa Corp!

Underwater on your mortgage? Want to avoid foreclosure? Need to sell? 

Significa Corp and Keller Williams Lancaster have teamed up to offer a short solution to home owners that need to sell and/or are looking to avoid foreclosure! Significa works with you, the seller, and your agent to provide the knowledgeable and experienced expertise necessary to get your home listed and sold. In addition to your agent, you'll work with the Short Sale Director who will counsel you through the entire process. Significa, America's Short Sale Solution, will provide you with an Attorney to advise and review contracts. They also provide you with a Processor and a Negotiator to work directly with the lender to get your home sold and protect your best interest. The banks have these resources and you need them too!

Significa has a proven track record in successfully closing short sales and helping homeowners avoid foreclosure. We help create certainty for people in transactions that are inherently uncertain! Your agent does what they do best - list your home and find you a qualified buyer. We do what we do best  - negotiate and close the short sale of your home in a timely manor.

Now you have a team of professionals on your side! Why would you go any where else?


Contact me to learn how our team of professionals can help you during this difficult time.

Kevin Rowley
Short Sale Director
Significa Corp & Keller Williams Realty Lancaster
1630 Manheim Pike
Lancaster, PA 17601
717-735-1145 (o)
717-945-3326 (c)
Kevin@KRowley.com