The homeowner has the right to cure the loan (i.e.

, pay off all arrears and reinstate the

loan) up to one hour before the sale. (41 Pennsylvania Statutes Section 404).

Mortgage foreclosure in Pennsylvania has been held to be purely statutory, thereby
requiring strict compliance with the governing rules and statutes. First Federal Savings
and Loan Assn v. Porter, 408 Pa. 236, 183 A. 2d 318 (1962).

Pennsylvania first created a statutory right to cure a mortgage default in 1974 by
establishing Act 6, also known as the Loan Interest and Protection Law. By cure, the
statute means a restoration of the mortgage to the same position as if the default had not
occurred. Act 6 established the right to cure defaults up until one hour before a sheriff
sale. (41 P.S. Section 404).

Act 6 was strengthened by Act 91 of 1983, which effectively extended the right to cure to
most residential mortgages and established a state-operated revolving loan fund to
provide funds sufficient to cure a default to those homeowners applying for assistance
and meeting the program eligibility criteria of the Homeowners Emergency Mortgage
Assistance Program (HEMAP).

Both laws were strengthened by the amendments in 2008 in response to the foreclosure
crisis.

The right to cure a mortgage default extends to one hour prior to the sheriffs sale. (41
P.S. Section 404(a)). By virtue of the statutory right, the homeowner can challenge the
judgment by:

(a) Filing a petition to strike and/or to open the judgment. A petition to strike a
judgment operates as a demurrer to the record and will only be granted for
defects appearing on the face of the record. A common example relates to sewer
service where the record lacks evidence that the plaintiff complied with the
presuit notice requirements of Act 6 or Act 91, or that the defendant was never
served with the complaint, or where the complaint underlying the judgment
lacked any allegation that the plaintiff obtained an assignment of the mortgage
from the original mortgagee named in the mortgage.

(b) Filing a petition to open which relies on matters outside of the record and is
addressed to the equitable powers of the court. It requires a party to make a three-
part showing that (1) the petition had been filed promptly following the judgment,
(2) the failure to appear in the case or file an answer was excusable, and (3) the
petitioning defendant had a meritorious defense. Each of these three tests is
liberally construed.

(c) Another option to cure a mortgage default is through a post-judgment chapter
13 bankruptcy proceeding. The filing of a bankruptcy petition produces an
automatic stay of an execution sale that arises by operation of the Bankruptcy
Code. Under chapter 13, debtors are required to file a plan for repayment of their
debts, and the plan can provide for the curing of a mortgage default over a period
of 3-5 years. Debtors commit a portion of future income to fund the proposed
payments, submitting monthly payments to a chapter 13 standing trustee while
maintaining their post-bankruptcy contractual mortgage payments. An ancillary
benefit is that junior mortgages are subject to being stripped down, and other
liens can be avoided in their entireity.

Further authority of the right to cure is found in Rule 3183:

Rule 3183 Stay of execution; setting aside execution
(a) Execution shall be stayed as to all or any part of the property of the defendant
(1) upon written direction of the plaintiff to the sheriff;
(2) upon a showing of exemption or immunity of property from execution;
(3) upon a showing of a right to a stay under the provisions of an Act of Congress
or an Act of Assembly.
(b) Execution may be stayed by the court as to all or any part of the property of the
defendant upon its motion or application of any party in interest showing
(1) a defect in the write of service; or
(2) any other legal or equitable ground

http://www.pacode.com/secure%2Fdata/231/chapter3000/s3183.html


41 Pennsylvania Statutes Section 404

The statutory provisions found in Title 41 of the Pennsylvania Statutes establish a
number of consumer protection safeguards with respect to residential mortgages. These
provisions are commonly referred to as Act 6, since they were grouped together in a
statute passed in 1974.

Section 404 of Act 6 sets forth the procedures that must be followed to cure a default in a
residential mortgage. It states the following:
(a) Notwithstanding the provisions of any other law, after a notice of intention to
foreclose has been given pursuant to Section 403 of this act, at any time at least one hour
prior to the commencement of bidding at a sheriff sale or other judicial sale on a
residential mortgage obligation, the residential mortgage debtor or anyone in his behalf,
not more than three times in any calendar year, may cure his default and prevent sale or
other disposition of the real estate and avoid acceleration, if any, by tendering the amount
of performance specified in subsection (b) of this section.

See also 10 Pa. Code Section 7.2 which defines performance and also defines one hour
prior to commencement of bidding as follows: For purposes of Section 404 of the Act
(41 P.S. Section 404), [one hour prior to commencement of bidding] shall be deemed to
mean one hour prior to the scheduled start of the general proceeding at which the real
property in question was originally listed for sale. See In re Rouse, 48 B.R. 236 (E.D.Pa.
1985).