PRINTER'S NO. 528

THE GENERAL ASSEMBLY OF PENNSYLVANIA


SENATE BILL

No. 486 Session of 2007


        INTRODUCED BY BROWNE, FERLO, BOSCOLA, TOMLINSON, ERICKSON,
           RAFFERTY, RHOADES, COSTA AND BAKER, MARCH 15, 2007

        REFERRED TO URBAN AFFAIRS AND HOUSING, MARCH 15, 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
    32     bonds and notes legal investments for certain purposes; and
    33     indicating how the act shall become effective," further


     1     providing for the Homeowner's Emergency Assistance Program,
     2     for notice and institution of foreclosure proceedings, for
     3     notice requirements, for assistance payments and for
     4     repayment; and providing for an ongoing foreclosure study.

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

    20070S0486B0528                  - 2 -     

     1  referred to commonly as the Usury Law. This notice shall be in
     2  plain language and specifically state that the recipient of the
     3  notice may qualify for financial assistance under the
     4  Homeowner's Emergency Mortgage Assistance Program. [This notice
     5  shall contain the telephone number and the address of a local
     6  consumer credit counseling agency.]
     7     (1.1)  The notice shall contain, but not be limited to, the
     8  following information:
     9     (i)  The name of the mortgagor and the address of the
    10  mortgaged premises, including the property tax identification
    11  number and the account number.
    12     (ii)  The name and address of the servicer of the mortgage,
    13  with a toll-free telephone number, facsimile number, electronic
    14  mail address and contact person's name, and the name and address
    15  of the holder of the mortgage. If the holder is a loan trust,
    16  the name and address of the trustee and the name of the trust in
    17  which the particular mortgage is included.
    18     (iii)  The date the loan was originated, the name of the
    19  originating lender, the original principal amount of the loan,
    20  the interest rate on the loan or, if a variable rate, the rate
    21  that was effective when the loan was originated and the fact
    22  that it is a variable rate.
    23     (iv)  A list of consumer credit counseling agencies which
    24  have been approved by the agency only for the county in which
    25  the mortgaged premises is located, including their addresses and
    26  telephone numbers. The agency shall maintain an up-to-date list
    27  of approved consumer credit counseling agencies for each county
    28  and publish the list on the agency's Internet website. A
    29  reference to the agency's Internet website shall also be
    30  included in the notice.
    20070S0486B0528                  - 3 -     

     1     (v)  Any other information determined by the agency.
     2     (1.2)  This notice shall be in lieu of any other notice
     3  required by law. This notice shall also advise the mortgagor of
     4  his delinquency or other default under the mortgage including an
     5  itemized breakdown of the total amount past due and that such
     6  mortgagor has thirty (30) days, plus three (3) days for mailing,
     7  to have a face-to-face meeting with [the mortgagee who sent the
     8  notice or] a consumer credit counseling agency to attempt to
     9  resolve the delinquency or default by restructuring the loan
    10  payment schedule or otherwise. The mortgagee or other person
    11  sending the notice to the mortgagor shall simultaneously send a
    12  copy of each notice issued to the agency by regular mail,
    13  facsimile, electronic mail or another means of electronic
    14  transfer in accordance with agency guidelines. In lieu of
    15  sending a copy of each notice, the mortgagee or other person
    16  charged with sending the notice may provide the agency with
    17  statistical information on a monthly basis as to the number of
    18  notices sent pursuant to this act and pursuant to section 403 of
    19  the Usury Law. This information shall be broken down by county
    20  and census tract.
    21     (2)  The notice under paragraph (1) must be sent by a
    22  mortgagee at least thirty (30) days before the mortgagee:
    23     (i)  asks for full payment of any mortgage obligation; or
    24     (ii)  begins any legal action, including foreclosure, for
    25  money due under the mortgage obligation or to take possession of
    26  the mortgagor's security.
    27     (3)  The proposed notice under paragraph (1) shall be
    28  published by the agency in the Pennsylvania Bulletin within one
    29  hundred twenty (120) days of the effective date of this
    30  paragraph. The notice actually adopted for use by the agency
    20070S0486B0528                  - 4 -     

     1  shall be promulgated as part of the program guidelines required
     2  by section 401-C(b).
     3     (4)  If the mortgagor meets with a consumer credit counseling
     4  agency, the consumer credit counseling agency shall promptly
     5  notify all of the mortgagees secured by the mortgagor's real
     6  property, and no mortgagee so notified shall commence any legal
     7  action against the mortgagor's real property for a period not to
     8  exceed thirty (30) calendar days from the date that the
     9  mortgagor first meets with the consumer credit counseling
    10  agency.
    11     (5)  [The notice shall include a statement that, if the
    12  mortgagor is unable to resolve the delinquency or default within
    13  thirty (30) calendar days of the mortgagor's first contact with
    14  either the mortgagee or a consumer credit counseling agency, the
    15  mortgagor may apply to the agency or its duly authorized agent
    16  at the address and phone number listed in the notice in order to
    17  obtain an application and information regarding the Homeowner's
    18  Emergency Mortgage Assistance Program.] The notice shall include
    19  a statement that the mortgagor must have a face-to-face meeting
    20  with one of the designated consumer credit counseling agencies
    21  within thirty (30) calendar days plus three (3) additional days
    22  for mailing. The purpose of this meeting shall be to attempt to
    23  negotiate a forbearance agreement to resolve the delinquency or
    24  default. If unable to do so, the mortgagor may then proceed with
    25  an application for a homeowner's emergency mortgage assistance
    26  loan.
    27     (6)  If the mortgagor applies for mortgage assistance
    28  payments, the agency shall promptly notify all of the mortgagees
    29  secured by the mortgagor's real property. The agency shall make
    30  a determination of eligibility within sixty (60) calendar days
    20070S0486B0528                  - 5 -     

     1  of receipt of the mortgagor's application. During the time that
     2  the application is pending, including any timely administrative
     3  appeal filed with the agency in connection therewith, no
     4  mortgagee may commence legal action to foreclose upon its
     5  mortgage with the mortgagor. The agency shall provide notice to
     6  the mortgagee if an administrative appeal is filed.
     7     (7)  An application for mortgage assistance may be submitted
     8  to the agency beyond the thirty (30)-day period specified in
     9  paragraph (5), and in such case, the agency shall make a
    10  determination within sixty (60) calendar days of receipt of the
    11  mortgagor's application. A late application or an administrative
    12  appeal will not stay foreclosure proceedings, but in the event
    13  the application is approved by the agency, a commenced
    14  foreclosure proceeding shall be stayed.
    15     * * *
    16     Section 3.  Section 405-C(e) of the act, added December 23,
    17  1983 (P.L.385, No.91), is amended and the section is amended by
    18  adding subsections to read:
    19     Section 405-C.  Assistance Payments.--* * *
    20     (a.1)  A mortgagee entitled to payments under this section
    21  shall provide to the agency within thirty (30) days of the
    22  agency's request the following documents and information:
    23     (1)  An itemized statement of the amounts due under the
    24  mortgage including all corporate advances incurred for which
    25  reimbursement from the mortgagor is demanded by the mortgagee.
    26  Demands for attorney fees, court costs and other advances shall
    27  be reasonable and shall reflect the amount of work and expenses
    28  actually expended and may not include any amounts incurred
    29  during any period a stay is in effect under this act.
    30     (2)  Copies of the following documents from the original
    20070S0486B0528                  - 6 -     

     1  mortgage transaction:
     2     (i)  The HUD-1 settlement statement.
     3     (ii)  The mortgage and note.
     4     (iii)  The appraisal, if an appraisal has been performed
     5  during the last five (5) years.
     6     (a.2)  Failure to provide in a timely fashion the documents
     7  and information required under subsection (a.1) will result in
     8  the mortgagee's forfeiture of the right to receive any late fees
     9  and attorney fees, costs and expenses.
    10     (a.3)  Upon the agency's payment of the initial payment to
    11  the mortgagee, including all corporate advances allowed by the
    12  agency, the mortgagee shall adjust its accounts to reflect that
    13  the mortgage obligation is, as of the date of receipt of such
    14  funds, reinstated and current for all purposes. The subsequent
    15  imposition by a mortgagee of any charges, fees or other amounts
    16  that were paid or disallowed by the agency, or waived by the
    17  mortgagee, shall be in violation of the act of December 17, 1968
    18  (P.L.1224, No.387), known as the "Unfair Trade Practices and
    19  Consumer Protection Law."
    20     * * *
    21     (b.1)  In lieu of paying arrearages under subsection (a) or
    22  ongoing assistance under subsection (b), the agency may fund a
    23  compromise pay-off of the balance of the mortgage, if the agency
    24  determines that structuring assistance in such a manner would be
    25  in the best interest of the agency and the mortgagor.
    26     * * *
    27     (e)  If any mortgagee scheduled to receive monthly payments
    28  from the agency pursuant to this article fails to receive from
    29  the agency the full amount of such monthly payment within thirty
    30  (30) days of the scheduled due date, or if a mortgagor fails to
    20070S0486B0528                  - 7 -     

     1  observe and perform all the terms, covenants and conditions of
     2  the mortgage, that mortgagee may, at any time thereafter, take
     3  any legal action to enforce the mortgage without any further
     4  restriction or requirement under this article.
     5     * * *
     6     Section 4.  Section 406-C(5) of the act, amended December 21,
     7  1998 (P.L.1248, No.160), is amended to read:
     8     Section 406-C.  Repayment.--Upon approval of mortgage
     9  assistance, the agency shall enter into an agreement with the
    10  mortgagor for repayment of all mortgage assistance made by the
    11  agency plus interest as provided in paragraph (5). The agreement
    12  shall provide for monthly payments by the mortgagor and be
    13  subject to the following provisions:
    14     * * *
    15     (5)  Interest shall accrue on all mortgage assistance made by
    16  the agency at [the rate of nine (9) percent per annum.] a rate
    17  of interest to be determined by the agency prior to the end of
    18  each calendar year for loans closed in the next calendar year,
    19  which rate shall not exceed the interest rate established by the
    20  Department of Banking pursuant to section 301 of the act of
    21  January 30, 1974 (P.L.13, No.6), referred to as the Loan
    22  Interest and Protection Law, and referred to commonly as the
    23  Usury Law. Interest shall start to accrue whenever the mortgagor
    24  begins to make repayment under this section. Interest shall
    25  accrue only during the period in which the mortgagor is required
    26  to make repayment under this section. When any mortgage for
    27  which mortgage assistance was made is paid, interest shall then
    28  accrue on all mortgage assistance due and owing at the same rate
    29  and on the same basis as the mortgage for which the mortgage
    30  assistance was made.
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     1     * * *
     2     Section 5.  The act is amended by adding a section to read:
     3     Section 412-C.  Ongoing Foreclosure Study.--The agency shall
     4  monitor foreclosure activity and trends in this Commonwealth,
     5  using data and information accumulated from notices and
     6  applications for assistance processed under this article, and
     7  shall, as appropriate, provide recommendations for addressing
     8  any problems identified in this monitoring effort.
     9     Section 6.  This act shall take effect in 60 days.














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