A homeowner who has fallen behind on the mortgage has more options than it feels like, and more time than they may realize. Pennsylvania forecloses through the courts, a process that typically runs for many months, and a homeowner can sell the property at any point before the sheriff’s sale. For a homeowner with equity, a sale before foreclosure is almost always better than letting the process run: it pays off the debt, protects their credit from a completed foreclosure, and puts the remaining equity in their pocket instead of losing it to fees, costs, and an auction price. The key is acting early.
The Act 91 notice: the first formal step
Under Pennsylvania’s Homeowner’s Emergency Mortgage Assistance Act, lenders on most residential mortgages must send an Act 91 notice before they can start foreclosure. The notice explains the homeowner’s rights, including the right to meet with a housing counseling agency, and describes the Homeowner’s Emergency Mortgage Assistance Program (HEMAP), administered by the Pennsylvania Housing Finance Agency, which can help eligible homeowners facing temporary hardship.
If an Act 91 notice arrives, it deserves immediate attention. The deadlines in it are short, and the counseling meeting and HEMAP application can open options that disappear once foreclosure begins.
The foreclosure timeline is a window to sell
Pennsylvania foreclosure is judicial: the lender must file a complaint in court and obtain a judgment before the property can be sold at a sheriff’s sale. Between the first missed payments and the sheriff’s sale, there is commonly a period of many months, often a year or more, depending on the county, the lender, and whether the homeowner responds.
That period is the homeowner’s window. A standard sale typically takes 30 to 60 days from accepted offer to settlement, plus time to prepare and market the home. Starting early leaves room to sell at full market value. Starting the week before a sheriff’s sale leaves almost none.
If you have equity: a standard sale
Most Philadelphia suburban homeowners who fall behind have equity, especially those who bought or refinanced years ago. For them, a standard sale is the cleanest solution. At settlement, the sale proceeds pay off the mortgage, including the past-due amount, late fees, and any foreclosure costs incurred so far, and the homeowner receives the rest.
A sheriff’s sale, by contrast, rarely captures full market value, and the costs of the foreclosure process eat into whatever equity remains. Selling first protects that equity.
If you owe more than it is worth: a short sale
When the mortgage balance exceeds what the home will sell for, a sale cannot pay the loan in full on its own. A short sale, in which the lender agrees to accept less than the full balance, requires the lender’s approval of the price and terms. Short sales take longer and require detailed hardship documentation, and the treatment of the remaining balance varies by lender and should be confirmed in writing. A deed in lieu of foreclosure, transferring the property directly to the lender, is another alternative in some cases. Both carry tax and credit implications worth reviewing with an attorney or tax advisor.
When foreclosure and divorce overlap
Many pre-foreclosure situations begin with a divorce: the household income splits, one spouse cannot carry the payment alone, and the mortgage falls behind while the parties disagree about the house. Both spouses remain liable on a joint loan, so a foreclosure damages both credit records regardless of who stopped paying. The guide to who pays the mortgage during a divorce in Pennsylvania covers how to keep the loan current while the case proceeds, and the guide to court-ordered sales covers what happens when the spouses cannot agree to sell.
Steps to take now
- Call the loan servicer. Ask what is owed to bring the loan current and what options exist, including repayment plans and modifications.
- Contact a HUD-approved housing counselor. Counseling is free and can help evaluate HEMAP and other assistance.
- Get a current market valuation. Knowing what the home will sell for tells you whether a standard sale, a short sale, or another option is realistic.
- Talk to an attorney if a foreclosure complaint has been filed, or if the situation involves a divorce or bankruptcy.
This guide is general information, not legal or financial advice.
Working with Karen
Karen Langsfeld is a REALTOR® and Pricing Strategy Advisor (P.S.A.) with Berkshire Hathaway HomeServices Fox & Roach in Dresher. She works discreetly with homeowners facing difficult financial situations across Montgomery County, Bucks County, the Main Line, and South Jersey, providing an honest valuation and a realistic sale timeline. Every conversation is confidential.
Contact Karen at (215) 495-2914 or through the contact page.