Douglass, West & Associates

Don’t Start Packing Yet!

During the course of a week I receive many calls from people, anxious because they have received a letter from a mortgage company stating an intent to foreclose on their mortgage. Invariably, the question is, “ How long will it be before the sheriff can sell my home.

Initially, one should realize that in order to sell your home there is a procedure, the mortgage company must follow certain rules and regulations. These rules were established so that a homeowners interest can not be easily terminated. Below is a brief description of the types of letters and/or pleadings which a person could receive concerning a foreclosure action. Please remember that under the law you have certain rights, but in order to exercise those rights you must follow proper procedures.

The correspondence which you could receive involving a foreclosure action are as follows:

  1.  Notice of Intent to Foreclose (Act 6)
  2. Notice of the Mortgage Assistance Act (Act 91)
  3. Complaint in Foreclosure
  4. Notice of Judgment
  5. Notice of Sheriff Sale

Notice of Intent to Foreclose

This is normally the first letter that a person receives when they have fallen behind in their mortgage payments. This letter informs you that; (a) you have a right to pay any payments that you have missed within thirty (30) days of the date of the letter, (the amount which is needed to reinstate the mortgage is stated in the letter) if you make that payment the mortgage will be treated as is it was never in default, (b) the mortgage company’s intent to foreclose on the property if you do not cure the default.

Basically, if you receive this letter you have thirty (30) days from the date of the letter to pay the full amount of the payments you have missed , plus late charges. You also have a right to; (1) sell the property, (2) transfer the property subject to the mortgage, or (3) borrow, from a bank, the money owed on the debt.

 Notice of the Mortgage Assistance (Act 91)

This is normally the second letter which you would receive, but sometimes this letter is sent with the Act 6 letter, therefore it is important for you to pay attention to the different letters, and their requirements. The Act 6 letter notifies you of your rights under the Mortgage Assistance Act of 1983. If the reason for the default has been from circumstances beyond your control, you may be entitled to assistance from the state.

More importantly, as a matter of right, at any point in the above process, you are entitled to file a Chapter 13 bankruptcy.  Upon the filing of a bankruptcy, all creditor action against your property will be stopped.  Basically, as to your mortgage, the bankruptcy would allow you to pay off the arrears over a period of time.  Therefore, if you have been denied assistance under the Mortgage Assistance Act and it is impossible for you to pay the amount of arrears in a lump sum payment, a Chapter 13 bankruptcy is you only alternative.  If you have any questions you can contact Ken West at Douglass, West and Associates at (610) 446-9000. 

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