Looking to save a home from Sherriff’s sale. Home is located in Pennsylvania, and schedule for sheriffs sale the end of June. Mortgage Company wants $60,000 in back payments and late fee’s to prevent sheriffs sale. Current home owner has $30,000 to offer and a qualified buyer who will act as cosigner if possible. My question is what kind of options are available here? Will the mortgage company negotiate that $60,000 if $30,000 is brought to the table? Would refinancing with that $30,000 and a qualified cosigner be an option? 

@Ryan Mcleod we are involved a lot with these types of situations. Sounds like you need to get in touch with the loss mitigation department at the current owners mortgage department and get a sales agreement in place pretty quickly to post pone the sheriffs sale. If it works the same in your part of the state that wont be too difficult. We are in Pittsburgh PA. Get an attorney involved to help post pone the sale and find a real estate agent who can handle the short sale for you and KNOWS the process. Not just any RE agent. If there is equity to save here then its worth the effort. It may be a lot of work and take a long time AND you may get nothing accomplished and lose the deal but it will be a great learning experience for you and you MAY make a nice profit if you are a Little lucky.

If you look up the foreclosure lawsuit at the county courthouse (this could even be online now), you should be able to see the law firm or attorney that is representing the lender. You don't necessarily need to hire your own attorney - you contact the lender's attorney to find out what will be needed to stay the foreclosure when there is somebody willing to purchase the house prior to sheriff sale. That law firm will probably have a form called "authorization to release loan information" that will have to be completed by the borrower to get into anything specific regarding this particular foreclosure; you might find that the lump sum of money that the borrower has could even re-instate the loan if the borrower is more interested in staying put and prefers to not sell.

So start with that attorney to find out what options might exist. The lenders really would rather not take the house, that is just the only alternative that remains for the lender to recover in most cases where the borrower does not have the means to make payments that satisfy amounts owed to the lender.

Typically the lender won’t bend in the amount needed to reinstate, that usually just kicks the Canadian the road. If you really have s “qualified buyer”, then they need to just buy it.

Why would you want to get in this mess? Doesn’t seem worth it.

@Ryan Mcleod

Assuming this is a Fannie or Freddie loan, it's a fairly mechanical process for the lender. The guidelines tell the lender what exactly they can do, can't do, and may do. So you may have a situation where the lender lacks the power to negotiate down the $60k. 

There are both Federal and Pennsylvania laws that require the lender --- in some situations --- to modify the loan agreement to avoid default. But those options are typically explored long before the sheriff's sale is scheduled. 

Depending on the circumstances, the owners may want to consider Chapter 13 Bankruptcy. That could buy a little bit more time to sort out the situation. 

Agree with @Alex Deacon and @Steve Babiak about hiring a lawyer. You may want to find one that specializes in representing debtors. When there is a drawn-out battle between the lender and the debtor, the lender will almost always win. At the end of the day, the lenders have billions/trillions in assets while the debtor doesn't. But a good debtor lawyers may help their clients figure out the best option out of a difficult situation. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.