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Information on Foreclosure Prevention

The Pennsylvania Housing Finance Agency may be able to assist you in saving your home from foreclosure. If you have missed mortgage payments or are experiencing a hardship, it is best to contact your servicer and PHFA as soon as possible. If you are having trouble making your mortgage payments, do not assume your situation is hopeless. Do not ignore letters and phone calls from your servicer. Your servicer can work with you to explore all options and alternatives to foreclosure. A counseling agency can assist you in establishing manageable spending and debt repayment program.

Act 91 Notice

The Agency has a program to assist with delinquent mortgages, the Homeowners' Emergency Mortgage Assistance Program, known as HEMAP. The process begins with your lender issuing an Act 91 Notice. This Notice advises you of your right to apply for a loan from this Program which could cover your delinquent payments as well as assist on a monthly basis if the household income is insufficient. The main areas of eligibility are that the property must be owner-occupied, you must be delinquent due to circumstances beyond your control and you must be able to show that you will be able to resume the full mortgage payments within a maximum of 24 months. Once you get an Act 91 Notice, you should contact a counseling agency as listed within the Notice. If you apply timely, within 33 days from the date of the Notice, no further action can be taken by your lender. Once you meet with a counselor, they have 30 days to submit your application to HEMAP and upon receipt, HEMAP has 60 days to make a decision. You will be notified by mail of the decision. As long as the process remains timely, your lender cannot take foreclosure action.

Contact Your Servicer

If you think your next mortgage payment may be late, or if you are currently past due, the most important step is to contact your servicer immediately.

Mortgage Assistance

If you have a mortgage with PHFA and are in need of assistance with your mortgage, completion of the Financial Statement is the first step in asking PHFA to review your loan for possible assistance. Select one of the following for a fillable PDF: English Spanish.

Counseling Options

Pennsylvania residents are eligible for FREE housing counseling to assist with mortgage delinquency, foreclosure prevention, and debt management.

Alternative Choices to Consider

The type of mortgage loan you have determines what alternatives you may be eligible to pursue. Please contact your servicer to discuss which alternatives you may be eligible for. When experiencing difficulty making your mortgage payments, you have two choices:

1. Retain your home (retention), or
2. Relinquish ownership of the property (disposition)

Options to Retain your Home:

The following options may result in retaining ownership of your property.

• Repayment Plan: This involves establishing a schedule with your servicer to make a full monthly payment plus extra each month in order to repay the delinquent amount over a specified time period.
• Special Forbearance Plan: This option may provide for a temporary reduction or suspension of payments. In order to repay the delinquency, future payments will be increased once the plan is completed.
• Mortgage Modification: This option allows you to modify the current terms of your mortgage.
• HAMP Modification: FHA insured loans may be eligible for a HAMP loan modification with a partial claim.
• Refinance: This option allows you to use the equity that you have established in your home to pay the delinquent amount. Depending on the interest rate of your new loan, your monthly payments might be reduced. You can explore refinancing with a lender of your choice. More about PHFA's refinance options.
• Homeowners' Emergency Mortgage Assistance Program: HEMAP provides financial assistance to Pennsylvania residents who face losing their primary residence through foreclosure. Depending on your situation, you may be eligible to receive a LOAN to bring your mortgage payments current (FHA insured loans do not qualify for this option). Depending on your circumstances, you may be eligible to receive financial assistance with your monthly mortgage payment for up to 24 months from the date of default. More about HEMAP / Act 91.

Options to Dispose of your Home:

In situations where you are no longer able to retain ownership of the home, the following disposition options may be available as an alternative to foreclosure. These options may affect your credit rating less than a foreclosure.

• Sell The Home: Sell the property in order to pay your mortgage loan in full.
• Assumption: With this option, you would sign over the property to a qualifying individual. That individual would then take possession of the home and take over making the mortgage payments.
• Pre-Foreclosure Sale: This option would allow you to sell your property for an amount less than what is necessary to pay off the mortgage loan.
• Deed In Lieu Of Foreclosure: This option would allow you to voluntarily give back the property to your servicer.

Helpful Links

The following links may assist you in learning more about the possible solutions to avoid foreclosure.

U.S. Department of Housing and Urban Development Links:

• Avoiding Foreclosure
• How To Avoid Foreclosure Brochure
• HUD Approved Housing Counseling Agencies List

Veterans Administration Links:

• Trouble Making Payments

General Links:

• Fannie FAQ Beware Scams

• Mortgage 101