Understanding foreclosure

Foreclosure is a difficult topic to address. It is not as fun or exciting as buying your first home, but foreclosure prevention counseling is a big part of what we do at AHCOPA. Our housing counselors support homeowners facing complicated financial situations and help them identify realistic solutions. 

Foreclosure is the act of a bank or other lien holder gaining ownership of the home because of non-payment. A mortgage foreclosure can begin once a mortgage is 120 days delinquent, or 4 months late. The timeline for tax foreclosure varies county by county, but foreclosure can occur due to unpaid taxes. Other lien holders, such as the lender of a home equity line of credit, can also seek foreclosure for non-payment. 

About a third of our foreclosure clients are heirs, meaning they inherited their house after a loved one passed. Foreclosure prevention counseling plays a major role in preserving generational wealth for these families. AHCOPA aims to protect equity and work with each client to find solutions that will truly work for them. Owning and maintaining a home, or second property, may not be the right choice for everyone. Our ultimate goal is to support an heir’s decision. Sometimes, because of complicated inheritance laws, lack of a will, or servicer issues, we refer clients to legal aid organizations.   

In Pennsylvania, foreclosures must go through the courts. This means that homeowners will also be charged fees for the lawyers who were hired to file the foreclosure. On top of that, homeowners are charged late fees and miscellaneous service fees associated with delinquency. Solutions that take longer will inevitably cost more. Tax foreclosures can also become more complicated because third parties may purchase the tax lien. The purchaser may wish to evict the homeowner or charge interest on the debt owed. 

We support clients who are facing foreclosure by providing free housing counseling. Our counselors meet face-to-face with homeowners or heirs to review their current situation and determine options for resolution. Housing counselors help each homeowner or heir understand mortgage servicer retention options, adjust their personal budget to meet their goal, and identify assistance programs, e.g. HEMAP or homestead exemption. 

Our services were highlighted in a NBC 10 Responds: Managing your money report by Tracy Davidson. The comprehensive report is full of valuable resources and it features AHCOPA's very own Fernando Leal. Fernando has helped hundreds of clients save their homes from foreclosure, and we are very grateful for his work!

In 2023, 80% of AHCOPA foreclosure clients reached a favorable resolution. Help is available. Avoiding the problem will not solve it! If you or someone you know is behind on a mortgage, it’s important to speak to a housing counselor as soon as possible. To schedule a foreclosure prevention appointment, call 215-765-1221.

Naara SILVA

Naara serves at AHCOPA as a second year AmeriCorps VISTA in the Housing Action Corps ​