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.

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From the Blog "Stop My Foreclosure Instantly"  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.

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.

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!