One of the gravest mistakes I’ve seen people make is moving soon after they are served an Act 91 notice (In Pennsylvania that means it is an intent to foreclose by the bank).
An Act 91 notice is the first step in the foreclosure process. This notice indicates that the secured creditor, usually a bank, intends to foreclose on your property. This is the first step in foreclosing on your home, but there are many steps and the creditor can be slowed or stopped at each of them along the way.
If you think that you want to stop and try to save your home, the absolute worst thing you can do is move!
There are many reasons not to move.
- You do not have to move yet, so you are spending money renting or living with relatives without a need to.
- If you leave the property and then return to it later it may be in disrepair because you weren’t there to take care of it.
- Even if you are ultimately unable to stay, you will be able to live rent-free for a year, probably longer, and save up money to start over again.
- After foreclosure, the new owner of the property may offer you money to leave. If you have already left, you will never get that offer!
I met with an elderly couple, mid-70s, who had put all their savings into a down-payment on their home (I will write more about why your home is not a retirement plan in another post) and when they received their Act 91 notice, they turned tail and left. They found a place that rented for the same amount as their mortgage. That’s right, they were only three months behind on their mortgage and they left out of fear.
You don’t need to be afraid, you need to hire a lawyer.
If I had met with this couple when they first got their Act 91 notice, I would have been able to help them, by the time they saw me last week, it was too late.
Before a creditor can foreclose on your home, they must first win a lawsuit proving that not only do they own the loan (and they have gotten a lot better at showing up with those) but that they actually have the right to foreclose.
What is right to foreclose? Well this is a very tricky situation. Sometimes a secured creditor is from a pool of bonds, which means… well I don’t want your eyes to glaze over and we have auditors for that, but to make it short and sweet, the right party must be foreclosing, they must actually own the note, and showing up with the note itself isn’t always enough.
Once they prove they own the note and they have the right to foreclose, they have to prove that you have defaulted, which isn’t always as easy as it sounds.
I had one client in particular who showed six months behind on a $1200 per month mortgage. An audit of my client’s payment records indicated that the creditor had not applied two payments, had over billed him on taxes, over billed him on a line called “miscellaneous charges” and by doing so, he had been overcharged by nearly $13,200 before he fell behind on his mortgage. Imagine the shock on the lawyer’s face when I proved in court that my client was actually ahead. Egg on their face doesn’t even begin to describe it.
So you’re thinking, this is great and all Jim, but I’m actually really behind on my mortgage and the bank’s numbers are probably right, what can I do? Well the first thing you can do is pick up the phone and call my office at 610-928-1233 and set up a consultation. There will be no charge for this appointment and I will explain your rights and obligations, and more importantly, I will show you the myriad of options you have to save your home… and most of them cost less than what it costs to move.