What pre-foreclosure means
Pre-foreclosure is the time between missing mortgage payments and the foreclosure sale. The owner is behind, the lender may be preparing to foreclose or has already filed, but the house has not been sold. Through all of it, the owner still owns the house.
The term is informal. Pennsylvania’s court rules describe a mortgage foreclosure as a civil lawsuit (Pa.R.C.P. 1141) that ends in a sheriff sale, and none of its steps is called pre-foreclosure. Lenders, investors, and listing sites use the word for any home in that window, whether the owner is a month behind or a sale date is set.
How pre-foreclosure works in Pennsylvania
The order of events is set by federal servicing rules, two Pennsylvania statutes, and the court rules.
- The first missed payment. Under the federal servicing rules, a loan is delinquent from the date a payment “becomes due and unpaid” (12 CFR 1024.31).
- A call by day 36. The servicer must “establish or make good faith efforts to establish live contact with a delinquent borrower no later than the 36th day” of the delinquency, and then tell the borrower about loss mitigation options, if appropriate (12 CFR 1024.39).
- A letter by day 45. The servicer must send a written notice “no later than the 45th day” that encourages you to contact it, gives a phone number for its assigned staff, describes examples of the options it may offer, explains how to apply, and lists how to reach HUD-approved housing counselors.
- The Act 91 or Act 6 notice. For most loans on an owner-occupied home, the Act 91 notice goes out once the owner is at least 60 days behind and at least 30 days before any lawsuit. It gives the owner “thirty (30) days, plus three (3) days for mailing, to have a face-to-face meeting with a consumer credit counseling agency” (Act 91). Loans covered only by Act 6 get a separate notice “at least thirty days in advance” of the lawsuit (41 P.S. § 403).
- The 120-day line. The servicer generally cannot make the first foreclosure filing until the loan is “more than 120 days delinquent” (12 CFR 1024.41).
- The lawsuit and the sale. After that, the lender can file a complaint in the Court of Common Pleas, and once it has a judgment, the sheriff can sell the house. Our guide to the foreclosure process in Pennsylvania covers those steps.
These federal rules cover loans on the borrower’s principal residence. Small servicers are exempt from the early contact and letter rules, but the 120-day rule still applies to them (12 CFR 1024.30; 12 CFR 1024.41).
How long pre-foreclosure lasts
There is no fixed length. The 120-day rule sets about four months before the first filing, and the Pennsylvania court notices add at least two more before a sale date. A complete application for help, conciliation in Allegheny County, and postponements can each add months. Our guide to how long foreclosure takes in Pennsylvania lays out each stage and its minimum.
What you can still do
Pre-foreclosure is when you have the most options, because none of the deadlines has passed yet.
- Talk to your servicer. If you send it a complete loss mitigation application before the first foreclosure filing, it generally cannot file until it has decided the application and any appeal, or you turn down what it offers (12 CFR 1024.41).
- Meet the Act 91 deadline. The Pennsylvania Housing Finance Agency says you must meet with a counseling agency “within 33 days from the date of your Act 91 Notice” to apply for its HEMAP loan and put the foreclosure on hold (PHFA).
- Catch up. Paying what is past due, with any fees and costs, brings the loan current. For loans covered by Act 6, that right lasts until one hour before the sheriff sale bidding.
- Sell. You can sell the house as long as the sale pays off the loan. See selling a house in foreclosure.
Our guide on how to stop foreclosure in Pennsylvania covers each option and its deadline.
What a pre-foreclosure sale is
A pre-foreclosure sale is a sale by the owner before the foreclosure sale. If the price covers what is owed, it is an ordinary sale: the title company pays off the loan at closing, and the owner keeps what is left. If the house is worth less than the payoff, the lender has to approve it as a short sale, which the Consumer Financial Protection Bureau describes as “a sale of your home for less than what you owe on your mortgage” (CFPB). FHA calls its own short sale program a Pre-Foreclosure Sale. Our guide to short sales in Pennsylvania explains how they work.
Why investors send letters
Foreclosure leaves a public trail. The Allegheny County Sheriff’s Office posts each sale list on its website, with each property’s status (Allegheny County Sheriff), and sale ads run in the Pittsburgh Legal Journal. Investors, agents, and companies like ours use those records to find owners who may want to sell.
A letter is not a deadline. Take the time you need, compare any offer with your other options, and be wary of anyone who asks for an upfront fee or for your deed. The Federal Trade Commission warns that companies charging upfront fees for mortgage relief are breaking the law, and that “transferring the deed does not transfer the mortgage, so you’ll still owe payments on your mortgage loan” (FTC).