Allegheny County Bar Association Releases Tips For Those Facing Foreclosures

Pittsburgh PennsylvaniaFebruary 13, 2012. The officers of the Allegheny County Bar Association today released legal tips for those individuals facing foreclosure of their residences. These tips are the seventh in a series of monthly briefs from the association on a timely legal issue.  The legal tips are part of the association’s ramped-up marketing efforts to better inform the general public about the free legal information, assistance, and services available through the bar.

According to Howard J. Schulberg, President of the Allegheny County Bar Association, “Our Lawyer Referral Service continues to receive calls from residents who need legal advice about stopping foreclosure proceedings on their homes.  Unfortunately, many of the callers have waited too long to seek assistance.  We want to ensure that our citizens have the information they need and that they are aware of the importance of taking immediate action early in the process.”

Schulberg said the bar association is not alone in wanting to let affected homeowners know the options available to them.  “We receive calls from people who are seeking legal assistance in saving their homes and we try to help, but there are many organizations and agencies that are trying to educate the public about steps they can take to save their homes from foreclosure.”

Future monthly tips will focus on such areas of the law as bankruptcy, wills and estates, collaborative law, divorce and custody issues, and teens and the law.  The January 2011 monthly legal tips dealt with legal tips for the new year.  For more information on the Allegheny County Bar Association’s monthly legal tips, visit the association’s For the Public website at

Chartered in 1870 and headquartered in downtown Pittsburgh, The Allegheny County Bar Association is a professional organization with more than 6,500 member attorneys, judges, legal administrators, and paralegals.


Howard J. Schulberg
Allegheny County Bar Association

Whitney Hughes
Director of Lawyer Referral Service
Allegheny County Bar Association

Tom Loftus
Director of Marketing/Media Relations
Allegheny County Bar Association

Allegheny County Bar Association Monthly Legal Tips
“Your Rights in Foreclosure”
February 2012

Unfortunately, we continue to hear that people are still facing foreclosures as a result of the struggling economy.

Knowing the available options to those who find themselves in financial trouble involving their most important investment, their homes, can make all the difference in the world.

Making Home Affordable Program
The program allows up to 5 million homeowners to take advantage of lower interest rates by allowing them to refinance their mortgage and will assist another 4 million families by allowing them to modify their loan to bring monthly payments to a level they can afford.

The program is essentially split into two separate plans: Home Affordable Modification and Home Affordable Refinance.

Home Affordable Refinance
The refinancing option is available only for conforming loans owned or secured by Fannie Mae and Freddie Mac, so this will include most loans. The only loans not eligible are FHA, VA, and USDA loans. Those types of loans qualify for other assistance programs which would allow you to modify the loan so that you can retain ownership of your home.

Both Fannie Mae and Freddie Mac have 1-800 numbers to call and see if your loan qualifies (1-800-7FANNIE) and (1-800-FREDDIE).

Additional requirements are:

1. The property must be owner occupied. (You must be living in the property.)
2. The borrower must have sufficient income to support the new mortgage debt.
3. The first mortgage cannot exceed 105% of the current market value of the property.
4. You CANNOT be delinquent on your mortgage. You must be current.

Home Affordable Modification
The modification program may be an option for those who aren’t current on their mortgage.
To be eligible for the modification you must:

1. The property must be owner occupied.
2. Have an unpaid balance that is equal to or less than $729,750.
3. Have a loan that originated before Jan. 1, 2009.
4. Have a mortgage payment (including taxes, insurance, and homeowners association dues) that is more than 31% of the borrowers’ gross monthly income, and
5. Have experienced a significant change in income or expenses to the point where you can no longer afford your mortgage.

You don’t have to be delinquent on your mortgage payments, but you can be.

Under this program, the modified interest rate is not permanent. If the modified rate is below the market rate it will be fixed for a minimum of five years. Beginning in the sixth year the rate may increase no more than one percentage point per year until the rate reaches the Freddie Mac Primary Mortgage Survey rate on the day the modification was originally executed. If the modified rate exceeds the survey rate, the rate for the remainder of the term is the modified rate.

Also keep in mind that this program IS NOT mandatory—it’s voluntary. The government does offer financial incentives to those lenders that will participate, however, and most are expected to participate. Those who participate sign an agreement with the Treasury in which they agree to review every potentially eligible borrower who calls or writes asking to be considered for the program.

As these contracts are signed, a list of those participating will be available online at

Who can I talk to in order to find out what my options are and how to apply for either of these programs?
First, always contact your lender to see what it would be willing to do.   You should also contact one of the housing counseling agencies approved by the Department of Housing and Urban Development (HUD) located throughout Allegheny County. A list of these agencies can be found on HUD’s website at

If you have legal questions, you can call the Allegheny County Bar Association’s Lawyer Referral Service at 412-261-5555.