A foreclosure proceeding is a legal process that allows homeowners to catch up on delinquent mortgage payments. In addition to the mortgage payments in arrears, other charges may be attached to the mortgage. These additional charges must also be paid in full before the title of ownership of the property can be transferred back to the mortgagor.
Here are six important documents filed during a foreclosure proceeding:
1. Notice of Default
This document tells what has happened, how much time you have been given to make payment arrangements, or when your house might get sold if nothing is done. The Notice of Default typically has a due date, but you may have to pay a late fee before the due date.
If they are behind on the mortgage payments and the homeowner fails to act within the given time, the proceedings may start.
2. Complaint for Foreclosure
If the homeowner does not respond to the original notice of default, the lender files a complaint. This must be filed by the clerk of court in the county where the property is located. Foreclosure Prevention Counseling from a nonprofit housing counseling agency can help in preventing foreclosure by helping the homeowner make the necessary changes to their financial situation.
3. Deficiency Notice
A deficiency notice is usually filed when the homeowner fails to make a payment due, or it has been a few months since they have paid the mortgage, and there is still no response from the homeowner.
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The deficiency notice is a form that gives specific details about all of the delinquent money. The lender will ask for every dollar that should have been paid and what actions should be taken to restore the property to good standing. The deficiency notice will usually set a new payment deadline or say when they may sell the house.
4. Property Appraisal
A licensed appraiser performs a property appraisal and will determine the house’s value based on the comparables in the recently sold area. The appraiser will give a date when the report must be submitted.
The lender’s attorney uses this report to calculate a fair market value for the house. This is how much money they think they will get from selling it. According to the housing counseling agency, “the appraiser’s report is based on information provided in the foreclosure complaint, the previous sale history and of current listings, as well as an inspection of the property.”
5. Notice of Acceleration
The notice of acceleration is filed when the homeowner begins to be late with the payment. This is a very good indication that things are not going well, and the homeowner will have to start making payments immediately instead of waiting until late payments become regular. It usually presents an additional deadline to get back on schedule with the mortgage payments.
6. Deed in Lieu of Foreclosure
A deed in lieu of foreclosure is the one that completes the foreclosure process. It is a document that transfers the title of the home to the lender in exchange for relief from the mortgage debt that was owed.
This deed in lieu of foreclosure option can usually be less financially damaging than going through a full foreclosure proceeding, so it’s something that should be looked into. The lender will then sell or auction off the property so they can recoup as much of their loss as possible.
It is very important to understand the steps involved in mortgage foreclosure proceedings. That’s why a person should always seek out legal advice from a reputable Attorney or law firm. These documents are what you need to know to protect yourself and your property. The proceedings can majorly impact your life, so you need to be aware of everything happening.
Legal Aid in Pennsylvania:
Here in Pennsylvania, every legal aid firm within the state can set its own eligibility requirements, but the typical household income to qualify must be less than $41,000 per year for a family of 4.
Here is a list of some legal aid in PA that might be able to help:
You may or may not qualify for free legal aid. Regardless of your income or ability to pay, you should meet with a foreclosure defense attorney for a free consultation at the very least. You may find that the cost of foreclosure defense is more affordable than you previously thought, and you could find yourself on a path to saving your home. It never hurts to reach out and ask for help.
If you’re a Pennsylvania resident, you can reach out to AdvantageCCS for our free Foreclosure Prevention Counseling service. We are only able to help PA homeowners who are facing foreclosure. Here is more info about our free service: https://www.advantageccs.org/services/foreclosure-prevention-counseling/