Management System for Foreclosures in Pennsylvania

September 28th, 2008 | Tags: Foreclosures

With the courts being overwhelmed with foreclosure cases, Pennsylvania has chalked out a management system for tackling foreclosures. The plan is to hold meetings between the borrowers and the lenders under the aegis of the courts before the latter proceeds with the sheriff’s sale.

Philadelphia initiated the plan of Mortgage Foreclosure Diversion Pilot Program under the guidance of Sheriff John Green. A hold was placed on all the foreclosure auctions that were scheduled to be held in April. The City Council supported the plan by a resolution. Philadelphia city has given much publicity to this plan. The community organizations have been given a list of the owners who are at risk from foreclosures. Letters are also being mailed and door-to-door surveys carried out. In 2007 Philadelphia noted 6,200 foreclosures. In 2008 the figure will most probably touch 8,500. Across USA this year will close with 2.5 million foreclosures.

Blair County has been toeing this line since spring 2008. In all foreclosure cases conferences between the two parties are being encouraged. Allegheny County is also following this pattern and expects it to be enforced by September. Lackawanna County too has recently developed its own model of workout plans following the Philadelphia plan.

The Philadelphia plan stipulates that before the foreclosure of any owner occupied foreclosed unit a conference between the two warring parties has to be held. The value of the property would be assessed and feelers sent out to find out if the borrowers can avail of any state or federal help. The ultimate goal is to avoid foreclosures. Pro bono lawyers are representing the borrowers and pro tem judges are officiating over these conferences.

Many want the Philadelphia plan to cover the entire country. Senator Robert Casey sent a letter to the HUD secretary Steve Preston favouring the Philadelphia court program and highlighting its advantages. He wanted that the example could be emulated across the country. The Democratic senator also presented the case in Philadelphia City Hall on 7th August to advocates and representatives from Allegheny, Lackawanna, Lehigh and Montgomery counties. Judge Thomas Munley (Common Pleas, Lackawanna) felt that this type of discussion and conference approach would be more beneficial than the confrontational posture of foreclosures. He said, “If a judge can get involved to help, it’s a great idea and the lenders, I’m sure are going to get involved. They don’t want to have the loss of income.”