Philadelphia's Mortgage Foreclosure Diversion Program, explained
Short answer
If your Philadelphia home is owner-occupied, the court will not let your mortgage foreclosure go to sheriff sale until a conciliation conference has been held. Before that conference, you call the Save Your Home Philly Hotline at (215) 334-4663 for a free housing counselor, then meet the lender's attorney at City Hall to try to work out a solution.
- Owner-occupied residential properties "cannot proceed to Sheriff Sale" unless a conciliation conference is held (Joint General Court Regulation 2008-01).
- The lender cannot enter judgment until the conferences are concluded (First Judicial District).
- The City provides a free housing counselor through the Save Your Home Philly Hotline, (215) 334-4663 (City of Philadelphia).
- Conferences are held every Thursday in Courtroom 676, City Hall, at 9:00 a.m. and 1:00 p.m. (First Judicial District).
- If you skip the counselor or the conference, the court can let the lender proceed toward sheriff sale (Reg. 2008-01, § 6(c)).
What is the Philadelphia foreclosure diversion program?
It is a court-run program that pauses owner-occupied mortgage foreclosures so homeowners and lenders can try to settle. The Philadelphia Court of Common Pleas adopted it in 2008, "designed to prevent residential owner-occupied homes from proceeding to Sheriff's Sale and to help homeowners stay in their homes" (First Judicial District).
The court says the program celebrated saving 10,000 homes in 2016. The court's current program page still points to Joint General Court Regulation No. 2008-01, the rule that created it (regulation text).
Who does the program cover?
It covers mortgage foreclosures on owner-occupied residential property in Philadelphia. The regulation defines "residential premises" as property in the city with not more than four residential units, including a condo or co-op unit, that the owner occupies as a principal residence (Reg. 2008-01, § 1(a)).
Homes that are not owner-occupied, not residential, or not being sold to enforce a residential mortgage are outside the program. The sheriff may sell those as scheduled (§ 1(b)).
When the lender files, it is supposed to mark the case as owner-occupied residential. If you live in the home and your case wasn't marked that way, the court says you can file a certification and ask for a conference (First Judicial District). The court's certification form covers an owner, or an heir of a deceased owner, who lives in the home as a principal residence (program materials).
How the diversion process works, step by step
| Step | What happens | Source |
|---|---|---|
| 1. Complaint filed | A case management order schedules a conciliation conference; the 2008 regulation sets it 30 to 45 days after the complaint is filed | Reg. 2008-01, § 4 |
| 2. Service | The lender serves the order with the complaint | § 5 |
| 3. Call the hotline | You call (215) 334-4663 right away and meet a free housing counselor | § 4(c); City |
| 4. Proposal | The counselor sends the lender's attorney a proposal at least 10 days before the conference | Case management order |
| 5. Conference | You meet the lender's attorney at City Hall; a lender representative with authority to settle attends or is available by phone | FJD; § 4(b); case management order |
| 6. Court order | An order records the result: agreement, another conference, or permission to proceed | § 7 |
Before any of this, most homeowners will already have received an Act 91 notice, Pennsylvania's statewide pre-foreclosure warning. The diversion program is an extra layer that applies only in Philadelphia.
What happens at the conciliation conference?
You meet face to face with the lender's attorney to discuss ways to resolve the delinquency. The court says attorneys from Community Legal Services, Philadelphia Legal Assistance, SeniorLAW Center and Philadelphia's Volunteers for the Indigent Program are available to talk with homeowners about legal issues (First Judicial District).
If the two sides are stuck, they can ask for a judge pro tem, an experienced attorney who discusses the case and makes recommendations to the supervising judge. The regulation lists what the conference covers, including your income and expenses, your employment, whether you met a counselor, and which workout programs you may qualify for (§ 6(b)).
While the conference is pending, the lender may send the 10-day notice that comes before a default judgment, but it cannot get the default judgment until after the conference (§ 4(f)).
Getting a free housing counselor
Call the Save Your Home Philly Hotline at (215) 334-4663 (215-334-HOME). The City's Foreclosure Prevention Program provides housing counseling and legal aid to residents facing mortgage or tax foreclosure. Any Philadelphia homeowner who lives in the at-risk property may participate (City of Philadelphia).
The counselor helps you gather financial information and prepare the proposal your lender will review. The court's notice to homeowners is blunt: "To get this help you must call the Hotline and go to a Housing Counselor" (Save Your Home Philly notice).
The City also runs a Foreclosure Prevention Grant Program of up to $5,000 for homeowners who are three or more months behind (City of Philadelphia). Household income must be below 250% of the federal poverty level, and you must be able to keep up payments afterward (program page). Your counselor can tell you whether you might qualify.
What happens if no agreement is reached?
If the conference ends and the judge pro tem finds that an agreement is not possible, the court's standard order authorizes the lender to seek a default judgment and continue the case under the normal court rules (program materials). The same is true if you don't show up. Under the regulation, the conference requirement can be treated as satisfied once the court verifies notice was sent, and an order lets the lender proceed (§ 6(c)).
If you do reach an agreement, the case may be ended, or it may stay open. If it stays open and you later default on the agreement, the lender can pick the foreclosure back up. Our Philadelphia foreclosure page covers the sheriff sale steps that follow.
Selling during diversion
You still own the home during diversion, so you can usually sell it. The court's program materials list a "straight sale" and a short sale among the ways a case can be resolved, alongside modifications and repayment plans (program materials). A short sale needs the lender's approval because the price won't cover the full debt.
If you decide to sell:
- Keep going to the conference. Tell your counselor and the lender's attorney you are selling, and give them the expected closing date.
- Get a written payoff statement from your servicer (12 CFR 1026.36(c)(3)).
- Close through a title company that pays the lender directly. Never sign your deed over before closing.
Selling is one option among several, alongside a modification, a repayment plan, or help from HEMAP. If you're weighing a sale in Philadelphia, we can give you a written cash offer for a house in any condition, as-is, with no obligation, so you can compare it with what comes out of the conference.
Frequently asked questions
Who qualifies for the Philadelphia mortgage foreclosure diversion program?
Owners who live in the home as their principal residence, in a Philadelphia property with no more than four residential units, including condos and co-ops, when the lender is foreclosing on a residential mortgage. Rental and commercial properties are not covered.
How do I get a conciliation conference in Philadelphia?
If the lender marked your case as owner-occupied, the court schedules it automatically and the lender serves the order with the complaint. If it did not and you live in the home, you can file a certification asking the court to schedule a conference.
What is the Save Your Home Philly Hotline number?
Call (215) 334-4663, also written 215-334-HOME. The City provides a free housing counselor to help you prepare for the conference.
Can my house go to sheriff sale before the conciliation conference?
Not if it is covered. Under Joint General Court Regulation 2008-01, owner-occupied residential properties cannot proceed to sheriff sale unless a conciliation conference is held. If you skip it, the court can let the lender proceed.
What if I miss the conciliation conference?
The court can treat the requirement as satisfied once it verifies notice was sent, and issue an order authorizing the lender to proceed. Call the hotline right away and contact the court if you missed it.
Can I sell my house while in the diversion program?
Usually, yes. You still own the home. The court's program materials list a straight sale and a short sale among possible resolutions. Keep attending the conference and tell the lender's attorney your closing date.
Sources
- First Judicial District of Pennsylvania, Residential Mortgage Foreclosure Diversion Program
- First Judicial District, Joint General Court Regulation No. 2008-01; Save Your Home Philly Hotline notice; Program materials and court forms
- City of Philadelphia, Save your home from mortgage and tax foreclosure; Foreclosure Prevention Grant Program
- Pennsylvania Housing Finance Agency, HEMAP
- Consumer Financial Protection Bureau, Regulation Z § 1026.36 (payoff statements)
- U.S. Department of Housing and Urban Development, Find a housing counselor
This is general information, not legal or tax advice. Court procedures change, and the forms in the program materials date from the program's early years. For advice on your case, call the Save Your Home Philly Hotline at (215) 334-4663 or speak with a Pennsylvania attorney.