You fail to pay the mortgage payment by the due date, the first of the month.
Late charges are assessed on the payment. The mortgage servicer attempts to make contact with you to find out what happened.
The servicer sends you a “demand” letter because you failed to pay. The servicer has the right to demand the entire amount of the loan.
The servicer refers the loan to the foreclosure department and hires an attorney to start foreclosure proceedings.
The servicer then files the legal documents at the Court of Common Pleas. This is called a “complaint.” Once the case is filed, the court will send you a copy of the complaint by certified mail and/or through delivery by a sheriff’s deputy.
What happens next depends on what, if any, action you take. If you do nothing, the process may move swiftly. The servicer may file a motion with the Court for a "default judgment." This could happen one month after you receive court papers. The court may give the servicer a judgment quickly, setting up the house for a sheriff’s sale.
If you take action in response to the complaint, you must do so within 28 days. An attorney can help you through this process.
Once a court grants a judgment to foreclose, the sheriff will appraise the value of your house. Following the appraisal, the sheriff will schedule a sale and advertise the sale in the local newspaper for at least three weeks. The sale is a public sale which is held at a designated area either in the court house or at the sheriff’s office. Again, this may happen sooner or later, because times are only approximate. The property must sell for at least two-thirds of its appraised value. This is not the same as what you owe or the original purchase price. The sheriff will report the results of the sale to the court. The loan servicer will then ask the court to confirm the sale. This means the court will approve the sale, order a new deed for the buyer and distribute the money from the sale. There may still be a chance to save your home. Contact a housing counselor immediately.
After the Sale:
You have the right to buy back your home before the sale is confirmed. This "right to redeem the property" allows you to pay the amount you owe against the house in full. You will also owe any additional fees and costs incurred as a result of the foreclosure. Typically, it will take 30 days to "confirm" the sheriff’s sale.
You will be given a notice by the sheriff to leave. The amount of time varies by county. Call your local sheriff to check or to try to negotiate for more time.
This article is meant to give you general information and not specific legal advice. Prepared by Community Legal Aid Services, Inc. Updated April, 2012. CE-67-F214-CLAS