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.