A sheriff's sale is a judicial foreclosure process that takes place when a property owner becomes delinquent on a real estate loan and the lender files a mortgage foreclosure lawsuit with the court.
Property owners in Pennsylvania can stop a sheriff's sale up to right before the foreclosed property is scheduled for sale if they pay off the entire mortgage balance, regain the property by a short sale or file for bankruptcy.
What Is a Sheriff's Sale?
A sheriff’s sale is a public auction of repossessed property. Properties are sold via court order to pay the debts of the former homeowner. The proceeds pay off banks, mortgage companies, tax collectors and other creditors who lost money on the home.
A sheriff's sale and a foreclosure auction are different. A bank or another lender sells property directly in a foreclosure auction after seizing it for nonpayment; a sheriff's sale satisfies legal judgments under a court order against the former property owner.
Unpaid taxes or even utility bills can also result in a home's foreclosure. Well before the auction occurs, a lien is placed on the property, and the property owner receives notice of foreclosure.
Process for Sheriff's Sales in Pennsylvania
Local county sheriff’s offices in Pennsylvania handle a foreclosed property’s sale. Each jurisdiction creates its own schedule – larger cities, like Philadelphia, hold the sales once a month, while some small counties hold them quarterly. The auction is typically announced in local newspapers or online. Sales are open to the public, including lenders who wish to buy their property back.
The property is auctioned off to the highest bidder, who must then make a down payment and agree to pay the outstanding debt. The sheriff’s office in which the auction takes place must report a distribution schedule within 30 days of the home’s sale.
The 10-day period after the sale is reserved for objections to the sale, which can be challenged on grounds of fraud or lack of authority. At the time of sale, there is no guarantee about the condition of a property or that the sale will pay off any liens or municipal fines.
Notice of Intent to Foreclose in Pennsylvania
If the property owner receives a notice of intent to foreclose, this means the lender is beginning the foreclosure process, and the homeowner has already missed a number of mortgage payments. Pennsylvania requires lenders to send the property owner an Act 91 Notice within 30 days of filing foreclosure proceedings.
The notice informs them of their rights and assistance programs available that may help prevent foreclosure and an eventual sheriff's sale.
The state does not require lenders to begin the process exactly 30 days after mailing the notice, but it nevertheless serves as a warning that the property owner has met foreclosure requirements by nonpayment to creditors.
Stopping a Sale by Paying Off the Loan
An owner can also suspend the sale in one of a few ways. The first and most obvious way to stop a sheriff's sale in Pennsylvania is to pay off the loan. When the former owner does this, they’ll need to show documentation that they have repaid that debt.
Even if they can’t repay the entire loan or mortgage, they can still postpone the sale by filing a formal motion with the court to do this. The amount of time they have to file to postpone the sale varies from county to county. For example, in Philadelphia, the home owner can file up to one day before the sale.
Stopping a Sheriff's Sale Through Short Sale or Bankruptcy
When a home is offered at a sheriff’s sale, it typically does not sell for full market value. A lender can suspend the home’s sale up until the auction gavel falls and may sometimes consider a short sale. However, even if a lender agrees to a short sale, it may not choose to stall the property’s foreclosure or delist the home until the very last minute, just in case the deal falls through.
If the homeowner files for bankruptcy, it can cause all court collection actions to stop, including the sheriff's sale. A Chapter 13 bankruptcy lets the homeowner keep the property while developing a plan to repay part or all of their debt. With this type of bankruptcy, debtors can make installments to creditors over a three- to five-year period.
Filing bankruptcy must be done before the sale and not after. The homeowner should consult an attorney, who may suggest an automatic stay, which is an injunction preventing a lender from moving forward on debt collection.
Regaining Ownership Through the Right of Redemption
Owners can also get their house back through the right of redemption, which means they can regain ownership of the property if they pay the taxes they owe in full within nine months of the sale date. They will also repay the winning bidder in the sheriff’s auction and reimburse them for whatever they have spent on repairs over the past nine months.
However, the owner of the property surrenders the right of redemption if the property was vacant up to 90 days from the sale date. The right of redemption cannot be used on foreclosures as the result of mortgage nonpayment.
A property owner can also challenge a home's sale before the transfer of the deed to the new owner, which typically takes less than 21 days.
- HG.Org: How to Stop a Sheriff Sale in Pennsylvania
- Bartifay Law: How to Stop a Sheriff Sale in PA
- Philadephia Legal: Emergency Measures for Mortgage Foreclosure
- Philadelphia Courts: Petition-to-Postpone-Sheriff-Sale-Mortgage.pdf
- US Courts.gov: Chapter 13 - Bankruptcy Basics
- CaseText: 53 Pa. Stat. Section 7293 Redemption
- Foreclosure laws in Pennsylvania vary slight depending upon how much is owned on the loan.
- A sheriff's sale is the culmination of a court-ordered, months-long judicial foreclosure process that begins when a homeowner becomes delinquent on a loan and the lender initiates foreclosure. Generally, lenders initiate foreclosure when a property owner is 60 days in arrears.
- Check Pennsylvania laws for specific information.
- A sheriff's sale cannot be avoided if the homeowner doesn't have the funding to pay off the mortgage balance, including late fees.
Michelle Nati is an associate editor and writer who has reported on legal, criminal and government news for PasadenaNow.com and Complex Media. She holds a B.A. in Communications and English from Niagara University.