PRINTER'S NO. 1318

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 1083 Session of 2007


        INTRODUCED BY J. WHITE, DALEY, PAYTON, KORTZ, CALTAGIRONE,
           GEORGE, GERGELY, GIBBONS, HELM, JAMES, KULA, LEACH,
           LEVDANSKY, MANDERINO, MANN, McGEEHAN, PALLONE, M. O'BRIEN,
           SCAVELLO, MAHONEY, SIPTROTH, THOMAS, KOTIK, D. EVANS,
           JOSEPHS, HENNESSEY AND BELFANTI, APRIL 18, 2007

        REFERRED TO COMMITTEE ON COMMERCE, APRIL 18, 2007

                                     AN ACT

     1  Amending the act of December 3, 1959 (P.L.1688, No.621),
     2     entitled, as amended, "An act to promote the health, safety
     3     and welfare of the people of the Commonwealth by broadening
     4     the market for housing for persons and families of low and
     5     moderate income and alleviating shortages thereof, and by
     6     assisting in the provision of housing for elderly persons
     7     through the creation of the Pennsylvania Housing Finance
     8     Agency as a public corporation and government
     9     instrumentality; providing for the organization, membership
    10     and administration of the agency, prescribing its general
    11     powers and duties and the manner in which its funds are kept
    12     and audited, empowering the agency to make housing loans to
    13     qualified mortgagors upon the security of insured and
    14     uninsured mortgages, defining qualified mortgagors and
    15     providing for priorities among tenants in certain instances,
    16     prescribing interest rates and other terms of housing loans,
    17     permitting the agency to acquire real or personal property,
    18     permitting the agency to make agreements with financial
    19     institutions and Federal agencies, providing for the purchase
    20     by persons of low and moderate income of housing units, and
    21     approving the sale of housing units, permitting the agency to
    22     sell housing loans, providing for the promulgation of
    23     regulations and forms by the agency, prescribing penalties
    24     for furnishing false information, empowering the agency to
    25     borrow money upon its own credit by the issuance and sale of
    26     bonds and notes and by giving security therefor, permitting
    27     the refunding, redemption and purchase of such obligations by
    28     the agency, prescribing remedies of holders of such bonds and
    29     notes, exempting bonds and notes of the agency, the income
    30     therefrom, and the income and revenues of the agency from
    31     taxation, except transfer, death and gift taxes; making such


     1     bonds and notes legal investments for certain purposes; and
     2     indicating how the act shall become effective," further
     3     providing for the Homeowner's Emergency Assistance Program,
     4     for notice and institution of foreclosure proceedings, for
     5     notice requirements, for assistance payments and for
     6     repayment; and providing for an ongoing foreclosure study.

     7     The General Assembly of the Commonwealth of Pennsylvania
     8  hereby enacts as follows:
     9     Section 1.  Section 402-C(b) of the act of December 3, 1959
    10  (P.L.1688, No.621), known as the Housing Finance Agency Law,
    11  added December 23, 1983 (P.L.385, No.91), is amended to read:
    12     Section 402-C.  Notice and Institution of Foreclosure
    13  Proceedings.--* * *
    14     (b)  A mortgagee shall not accelerate the maturity of any
    15  mortgage obligation covered under this article, commence any
    16  legal action including mortgage foreclosure to recover under
    17  such obligation, or take possession of any security of the
    18  mortgage debtor for such mortgage obligation until a final
    19  determination has been made by the agency on a mortgagor's
    20  application for emergency mortgage assistance payments or the
    21  applicable time periods provided for in section 403-C have
    22  expired without the mortgagor applying for assistance in a
    23  timely fashion, whichever is earlier. A final determination may
    24  not be made by the agency until the conclusion of any timely
    25  administrative appeal that may have been filed with the agency.
    26     * * *
    27     Section 2.  Section 403-C(b) of the act, amended December 21,
    28  1998 (P.L.1248, No.160), is amended to read:
    29     Section 403-C.  Notice Requirements.--* * *
    30     (b) (1)  The agency shall prepare a notice which shall
    31  include all the information required by this subsection and by
    32  section 403 of the act of January 30, 1974 (P.L.13, No.6),

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     1  referred to as the Loan Interest and Protection Law, and
     2  referred to commonly as the Usury Law. This notice shall be in
     3  plain language and specifically state that the recipient of the
     4  notice may qualify for financial assistance under the
     5  Homeowner's Emergency Mortgage Assistance Program. [This notice
     6  shall contain the telephone number and the address of a local
     7  consumer credit counseling agency.]
     8     (1.1)  The notice shall contain, but not be limited to, the
     9  following information:
    10     (i)  The name of the mortgagor and the address of the
    11  mortgaged premises, including the property tax identification
    12  number and the account number.
    13     (ii)  The name and address of the servicer of the mortgage,
    14  with a toll-free telephone number, facsimile number, electronic
    15  mail address and contact person's name, and the name and address
    16  of the holder of the mortgage. If the holder is a loan trust,
    17  the name and address of the trustee and the name of the trust in
    18  which the particular mortgage is included.
    19     (iii)  The date the loan was originated, the name of the
    20  originating lender, the original principal amount of the loan,
    21  the interest rate on the loan or, if a variable rate, the rate
    22  that was effective when the loan was originated and the fact
    23  that it is a variable rate.
    24     (iv)  A list of consumer credit counseling agencies which
    25  have been approved by the agency only for the county in which
    26  the mortgaged premises is located, including their addresses and
    27  telephone numbers. The agency shall maintain an up-to-date list
    28  of approved consumer credit counseling agencies for each county
    29  and publish the list on the agency's Internet website. A
    30  reference to the agency's Internet website shall also be
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     1  included in the notice.
     2     (v)  Any other information determined by the agency.
     3     (1.2)  This notice shall be in lieu of any other notice
     4  required by law. This notice shall also advise the mortgagor of
     5  his delinquency or other default under the mortgage including an
     6  itemized breakdown of the total amount past due and that such
     7  mortgagor has thirty (30) days, plus three (3) days for mailing,
     8  to have a face-to-face meeting with [the mortgagee who sent the
     9  notice or] a consumer credit counseling agency to attempt to
    10  resolve the delinquency or default by restructuring the loan
    11  payment schedule or otherwise. The mortgagee or other person
    12  sending the notice to the mortgagor shall simultaneously send a
    13  copy of each notice issued to the agency by regular mail,
    14  facsimile, electronic mail or another means of electronic
    15  transfer in accordance with agency guidelines. In lieu of
    16  sending a copy of each notice, the mortgagee or other person
    17  charged with sending the notice may provide the agency with
    18  statistical information on a monthly basis as to the number of
    19  notices sent pursuant to this act and pursuant to section 403 of
    20  the Usury Law. This information shall be broken down by county
    21  and census tract.
    22     (2)  The notice under paragraph (1) must be sent by a
    23  mortgagee at least thirty (30) days before the mortgagee:
    24     (i)  asks for full payment of any mortgage obligation; or
    25     (ii)  begins any legal action, including foreclosure, for
    26  money due under the mortgage obligation or to take possession of
    27  the mortgagor's security.
    28     (3)  The proposed notice under paragraph (1) shall be
    29  published by the agency in the Pennsylvania Bulletin within one
    30  hundred twenty (120) days of the effective date of this
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     1  paragraph. The notice actually adopted for use by the agency
     2  shall be promulgated as part of the program guidelines required
     3  by section 401-C(b).
     4     (4)  If the mortgagor meets with a consumer credit counseling
     5  agency, the consumer credit counseling agency shall promptly
     6  notify all of the mortgagees secured by the mortgagor's real
     7  property, and no mortgagee so notified shall commence any legal
     8  action against the mortgagor's real property for a period not to
     9  exceed thirty (30) calendar days from the date that the
    10  mortgagor first meets with the consumer credit counseling
    11  agency.
    12     (5)  [The notice shall include a statement that, if the
    13  mortgagor is unable to resolve the delinquency or default within
    14  thirty (30) calendar days of the mortgagor's first contact with
    15  either the mortgagee or a consumer credit counseling agency, the
    16  mortgagor may apply to the agency or its duly authorized agent
    17  at the address and phone number listed in the notice in order to
    18  obtain an application and information regarding the Homeowner's
    19  Emergency Mortgage Assistance Program.] The notice shall include
    20  a statement that the mortgagor must have a face-to-face meeting
    21  with one of the designated consumer credit counseling agencies
    22  within thirty (30) calendar days plus three (3) additional days
    23  for mailing. The purpose of this meeting shall be to attempt to
    24  negotiate a forbearance agreement to resolve the delinquency or
    25  default. If unable to do so, the mortgagor may then proceed with
    26  an application for a homeowner's emergency mortgage assistance
    27  loan.
    28     (6)  If the mortgagor applies for mortgage assistance
    29  payments, the agency shall promptly notify all of the mortgagees
    30  secured by the mortgagor's real property. The agency shall make
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     1  a determination of eligibility within sixty (60) calendar days
     2  of receipt of the mortgagor's application. During the time that
     3  the application is pending, including any timely administrative
     4  appeal filed with the agency in connection therewith, no
     5  mortgagee may commence legal action to foreclose upon its
     6  mortgage with the mortgagor. The agency shall provide notice to
     7  the mortgagee if an administrative appeal is filed.
     8     (7)  An application for mortgage assistance may be submitted
     9  to the agency beyond the thirty (30)-day period specified in
    10  paragraph (5), and in such case, the agency shall make a
    11  determination within sixty (60) calendar days of receipt of the
    12  mortgagor's application. A late application or an administrative
    13  appeal will not stay foreclosure proceedings, but in the event
    14  the application is approved by the agency, a commenced
    15  foreclosure proceeding shall be stayed.
    16     * * *
    17     Section 3.  Section 405-C(e) of the act, added December 23,
    18  1983 (P.L.385, No.91), is amended and the section is amended by
    19  adding subsections to read:
    20     Section 405-C.  Assistance Payments.--* * *
    21     (a.1)  A mortgagee entitled to payments under this section
    22  shall provide to the agency within thirty (30) days of the
    23  agency's request the following documents and information:
    24     (1)  An itemized statement of the amounts due under the
    25  mortgage including all corporate advances incurred for which
    26  reimbursement from the mortgagor is demanded by the mortgagee.
    27  Demands for attorney fees, court costs and other advances shall
    28  be reasonable and shall reflect the amount of work and expenses
    29  actually expended and may not include any amounts incurred
    30  during any period a stay is in effect under this act.
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     1     (2)  Copies of the following documents from the original
     2  mortgage transaction:
     3     (i)  The HUD-1 settlement statement.
     4     (ii)  The mortgage and note.
     5     (iii)  The appraisal, if an appraisal has been performed
     6  during the last five (5) years.
     7     (a.2)  Failure to provide in a timely fashion the documents
     8  and information required under subsection (a.1) will result in
     9  the mortgagee's forfeiture of the right to receive any late fees
    10  and attorney fees, costs and expenses.
    11     (a.3)  Upon the agency's payment of the initial payment to
    12  the mortgagee, including all corporate advances allowed by the
    13  agency, the mortgagee shall adjust its accounts to reflect that
    14  the mortgage obligation is, as of the date of receipt of such
    15  funds, reinstated and current for all purposes. The subsequent
    16  imposition by a mortgagee of any charges, fees or other amounts
    17  that were paid or disallowed by the agency, or waived by the
    18  mortgagee, shall be in violation of the act of December 17, 1968
    19  (P.L.1224, No.387), known as the "Unfair Trade Practices and
    20  Consumer Protection Law."
    21     * * *
    22     (b.1)  In lieu of paying arrearages under subsection (a) or
    23  ongoing assistance under subsection (b), the agency may fund a
    24  compromise pay-off of the balance of the mortgage, if the agency
    25  determines that structuring assistance in such a manner would be
    26  in the best interest of the agency and the mortgagor.
    27     * * *
    28     (e)  If any mortgagee scheduled to receive monthly payments
    29  from the agency pursuant to this article fails to receive from
    30  the agency the full amount of such monthly payment within thirty
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     1  (30) days of the scheduled due date, or if a mortgagor fails to
     2  observe and perform all the terms, covenants and conditions of
     3  the mortgage, that mortgagee may, at any time thereafter, take
     4  any legal action to enforce the mortgage without any further
     5  restriction or requirement under this article.
     6     * * *
     7     Section 4.  Section 406-C(5) of the act, amended December 21,
     8  1998 (P.L.1248, No.160), is amended to read:
     9     Section 406-C.  Repayment.--Upon approval of mortgage
    10  assistance, the agency shall enter into an agreement with the
    11  mortgagor for repayment of all mortgage assistance made by the
    12  agency plus interest as provided in paragraph (5). The agreement
    13  shall provide for monthly payments by the mortgagor and be
    14  subject to the following provisions:
    15     * * *
    16     (5)  Interest shall accrue on all mortgage assistance made by
    17  the agency at [the rate of nine (9) percent per annum.] a rate
    18  of interest to be determined by the agency prior to the end of
    19  each calendar year for loans closed in the next calendar year,
    20  which rate shall not exceed the interest rate established by the
    21  Department of Banking pursuant to section 301 of the act of
    22  January 30, 1974 (P.L.13, No.6), referred to as the Loan
    23  Interest and Protection Law, and referred to commonly as the
    24  Usury Law. Interest shall start to accrue whenever the mortgagor
    25  begins to make repayment under this section. Interest shall
    26  accrue only during the period in which the mortgagor is required
    27  to make repayment under this section. When any mortgage for
    28  which mortgage assistance was made is paid, interest shall then
    29  accrue on all mortgage assistance due and owing at the same rate
    30  and on the same basis as the mortgage for which the mortgage
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     1  assistance was made.
     2     * * *
     3     Section 5.  The act is amended by adding a section to read:
     4     Section 412-C.  Ongoing Foreclosure Study.--The agency shall
     5  monitor foreclosure activity and trends in this Commonwealth,
     6  using data and information accumulated from notices and
     7  applications for assistance processed under this article, and
     8  shall, as appropriate, provide recommendations for addressing
     9  any problems identified in this monitoring effort.
    10     Section 6.  This act shall take effect in 60 days.














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