As a Pennsylvania resident and homeowner, it is vital to understand the terminologies associated with foreclosures. Foreclosure is an overwhelming experience that can take a toll on your financial wellbeing. Before the bank can take over your property, the process goes through pre-foreclosure. Understanding the difference between pre-foreclosure and foreclosure can help you navigate the process and take proactive actions to save your property. In this blog post, we will explain the difference between pre-foreclosure and foreclosure to help you make informed decisions to save your home.

1. What is Pre-Foreclosure?

Pre-foreclosure is a process that occurs after you miss several mortgage payments but before the property is advertised for sale. It is the first stage of a foreclosure process where the bank or mortgage company begins the process of collecting outstanding mortgage debt. During pre-foreclosure, your lender will send you a notice of default informing you that you are in default on your mortgage payments. The notice of default provides you with a specific amount of time to rectify the payment default, which is usually 30 days from the notice date.

2. Stages of Foreclosure

After you receive a notice of default, and you’re unable to pay your mortgage, the bank will continue the foreclosure process. The process typically starts with an auction sale of your property, which is known as a sheriff sale or trustee sale. If the property is sold at the auction for less than the outstanding mortgage balance, the balance is known as the deficiency balance. In Pennsylvania, lenders can initiate a deficiency judgment against you, which is the difference between the outstanding mortgage and the amount the property was sold at the auction.

3. What Homeowners Should Know about Foreclosure

Foreclosure is a serious process, which can damage your credit rating and cause a long-term financial problem. Once your property is sold at auction, you may be evicted from the property, and it may be challenging to purchase another home in the future. However, as a homeowner, there are measures you can take to stop or delay the foreclosure process. These include bankruptcy, loan modification, short sale, refinancing, and deed in lieu of foreclosure. These options can help you avoid the foreclosure process and save your property.

4. Importance of Hiring an Attorney

If you are facing pre-foreclosure or foreclosure, it is essential to hire an experienced attorney to help you navigate the process. A competent lawyer can explain the law, assess your options, and help you avoid common mistakes that can worsen your situation. The attorney can guide you through the process, identify any potential violations of law or procedure, and help you form a legal strategy to save your property.

Foreclosure is a stressful process that can affect your financial wellbeing and harm your credit rating. Pre-foreclosure is the first stage of a foreclosure process, where the lender sends you a notice of default. Afterward, the bank may auction your property to recover the mortgage balance, and you may be subjected to a deficiency judgment. As a Pennsylvania resident and homeowner, it is crucial to understand the difference between pre-foreclosure and foreclosure to help you make informed decisions. If you’re facing pre-foreclosure or foreclosure, it is advisable to engage an experienced attorney who can advise you on the potential options, guide you through the process, and help you save your property.