PRIOR PRINTER'S NO. 1318                      PRINTER'S NO. 3236

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, BELFANTI, FREEMAN, PARKER, LONGIETTI AND
           MENSCH, APRIL 18, 2007

        AS REPORTED FROM COMMITTEE ON COMMERCE, HOUSE OF
           REPRESENTATIVES, AS AMENDED, FEBRUARY 12, 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


     1     therefrom, and the income and revenues of the agency from
     2     taxation, except transfer, death and gift taxes; making such
     3     bonds and notes legal investments for certain purposes; and
     4     indicating how the act shall become effective," further
     5     providing for the Homeowner's Emergency Assistance Program     <--
     6     GENERAL AUTHORITY, for notice and institution of foreclosure   <--
     7     proceedings, for notice requirements, for assistance payments
     8     and for repayment; and providing for an ongoing foreclosure
     9     study.

    10     The General Assembly of the Commonwealth of Pennsylvania
    11  hereby enacts as follows:
    12     Section 1.  Section 402-C(b) of the act of December 3, 1959    <--
    13  (P.L.1688, No.621), known as the Housing Finance Agency Law,
    14  added December 23, 1983 (P.L.385, No.91), is amended to read:
    15     SECTION 1.  SECTIONS 401-C(D) AND 402-C(B) OF THE ACT OF       <--
    16  DECEMBER 3, 1959 (P.L.1688, NO.621), KNOWN AS THE HOUSING
    17  FINANCE AGENCY LAW, ADDED DECEMBER 23, 1983 (P.L.385, NO.91),
    18  ARE AMENDED TO READ:
    19     SECTION 401-C.  GENERAL AUTHORITY.--* * *
    20     (D)  THE AGENCY SHALL DESIGNATE AND APPROVE NONPROFIT
    21  CONSUMER CREDIT COUNSELING AGENCIES IN EACH COUNTY TO BE
    22  AVAILABLE TO ASSIST THE AGENCY IN IMPLEMENTING THE PROVISIONS OF
    23  THIS ARTICLE, INCLUDING, BUT NOT LIMITED TO, MANDATED
    24  COUNSELING. A "CONSUMER CREDIT COUNSELING AGENCY" SHALL BE
    25  DEFINED FOR THE PURPOSE OF THIS ARTICLE AS A NONPROFIT CONSUMER
    26  CREDIT COUNSELING AGENCY LOCATED IN PENNSYLVANIA WHICH IS
    27  APPROVED BY THE AGENCY OR A HOUSING COUNSELING AGENCY CERTIFIED
    28  BY THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN
    29  DEVELOPMENT. THE AGENCY SHALL MAINTAIN AN UP-TO-DATE LIST OF
    30  APPROVED CONSUMER CREDIT COUNSELING AGENCIES FOR EACH COUNTY AND
    31  PUBLISH THE LIST ON THE AGENCY'S INTERNET WEBSITE.
    32     Section 402-C.  Notice and Institution of Foreclosure
    33  Proceedings.--* * *
    34     (b)  A mortgagee shall not accelerate the maturity of any
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     1  mortgage obligation covered under this article, commence any
     2  legal action including mortgage foreclosure to recover under
     3  such obligation, or take possession of any security of the
     4  mortgage debtor for such mortgage obligation until a final        <--
     5  determination has been made by the agency on a mortgagor's
     6  application for emergency mortgage assistance payments or the
     7  applicable time periods provided for in section 403-C have
     8  expired without the mortgagor applying for assistance in a
     9  timely fashion, whichever is earlier. A final determination may   <--
    10  not be made by the agency until the conclusion of any timely
    11  administrative appeal that may have been filed with the agency.
    12     * * *
    13     Section 2.  Section 403-C(b) of the act, amended December 21,
    14  1998 (P.L.1248, No.160), is amended to read:
    15     Section 403-C.  Notice Requirements.--* * *
    16     (b) (1)  The agency shall prepare a notice which shall
    17  include all the information required by this subsection and by
    18  section 403 of the act of January 30, 1974 (P.L.13, No.6),
    19  referred to as the Loan Interest and Protection Law, and
    20  referred to commonly as the Usury Law. This notice shall be in
    21  plain language and specifically state that the recipient of the
    22  notice may qualify for financial assistance under the
    23  Homeowner's Emergency Mortgage Assistance Program. [This notice   <--
    24  shall contain the telephone number and the address of a local
    25  consumer credit counseling agency.]                               <--
    26     (1.1)  The notice shall contain, but not be limited to, the
    27  following information:
    28     (i)  The name of the mortgagor and the address of the
    29  mortgaged premises, including the property tax identification
    30  number and the account number.
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     1     (ii)  The name and address of the servicer of the mortgage,
     2  with a toll-free telephone number, facsimile number, electronic
     3  mail address and contact person's name, and the name and address
     4  of the holder of the mortgage. If the holder is a loan trust,
     5  the name and address of the trustee and the name of the trust in
     6  which the particular mortgage is included.
     7     (iii)  The date the loan was originated, the name of the
     8  originating lender, the original principal amount of the loan,
     9  the interest rate on the loan or, if a variable rate, the rate
    10  that was effective when the loan was originated and the fact
    11  that it is a variable rate.
    12     (iv)  A list of consumer credit counseling agencies which
    13  have been approved by the agency only for the county in which
    14  the mortgaged premises is located, including their addresses and
    15  telephone numbers. The agency shall maintain an up-to-date list
    16  of approved consumer credit counseling agencies for each county
    17  and publish the list on the agency's Internet website. A
    18  reference to the agency's Internet website shall also be
    19  included in the notice.
    20     (v)  Any other information determined by the agency.
    21     (1.2)  This notice shall be in lieu of any other notice
    22  THIS NOTICE SHALL BE IN LIEU OF ANY OTHER NOTICE required by      <--
    23  law. This notice shall also advise the mortgagor of his
    24  delinquency or other default under the mortgage including an
    25  itemized breakdown of the total amount past due and that such
    26  mortgagor has thirty (30) days, plus three (3) days for mailing,
    27  to have a face-to-face meeting with [the mortgagee who sent the
    28  notice or] a consumer credit counseling agency to attempt to
    29  resolve the delinquency or default by restructuring the loan
    30  payment schedule or otherwise. The mortgagee or other person
    20070H1083B3236                  - 4 -     

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

















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