PRIOR PRINTER'S NO. 1318 PRINTER'S NO. 3236
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 20070H1083B3236 - 2 -
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. 20070H1083B3236 - 3 -
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 20070H1083B3236 - 5 -
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 20070H1083B3236 - 6 -
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. 20070H1083B3236 - 7 -
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. 20070H1083B3236 - 8 -
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, 20070H1083B3236 - 9 -
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. C19L64VDL/20070H1083B3236 - 10 -