PRINTER'S NO. 1318
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), 20070H1083B1318 - 2 -
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 20070H1083B1318 - 3 -
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 20070H1083B1318 - 4 -
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 20070H1083B1318 - 5 -
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. 20070H1083B1318 - 6 -
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 20070H1083B1318 - 7 -
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 20070H1083B1318 - 8 -
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. C19L64VDL/20070H1083B1318 - 9 -