A few years ago, then PA Supreme Court Chief Justice Ronald Castille called on county courts to establish mortgage foreclosure diversion programs. His call to action was prompted by the explosion in mortgage foreclosure actions which have taken place over the past half-dozen years. In June, 2015, Montgomery County joined over 20 other Pennsylvania counties--including Philadelphia and Allegheny counties--which have established foreclosure diversion programs.
The Montgomery County program is reserved for residential, owner-occupied properties valued at less than $300,000. [Many counties' programs have valuation limits at lower amounts.] The Montgomery County program, like many foreclosure diversion programs, is an "opt-out" program: If a complaint in foreclosure is filed, it will automatically be listed for a conciliation conference before a housing counselor. An automatic stay of proceedings will be issued while fact-finding and negotiations are taking place. Though a judge will oversee the mortgage foreclosure diversion program, the actual fact-finding and conciliation conferences are set up and conducted by outside agency representatives.
If a homeowner fails to cooperate with the program, the automatic stay will be lifted and the mortgage-holder will be allowed to proceed toward foreclosure. The notices of the conciliation conferences will be sent by regular mail. Therefore, it is important for the homeowner facing disclosure to 1) check the mailbox every day, and 2) read the mail. Similarly, mortgage holders should understand that participation in the system is mandated for all qualifying mortgage foreclosure matters, and a failure to make a good faith effort at conciliation will delay, rather than expedite, foreclosure proceedings.