PRINTER'S NO. 569
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
466
Session of
2021
INTRODUCED BY MUTH, SAVAL, SANTARSIERO, KEARNEY, KANE AND
STREET, APRIL 13, 2021
REFERRED TO URBAN AFFAIRS AND HOUSING, APRIL 13, 2021
AN ACT
Providing for deferment program for mortgage payments, for
application criteria and procedures, for reduction of rent
for qualified tenants, for waivers during disaster
emergencies and for applicability.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Housing
Security Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Commercial mortgage loan." A loan for the acquisition,
construction or development of real property, or a loan secured
by collateral in the real property, that is owned or used by a
person, business or entity for the purpose of generating profit.
The term includes real property used for single-family housing,
multifamily housing, retail space, office space or commercial
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space.
"Department." The Department of Banking and Securities of
the Commonwealth.
"First mortgage loan." A loan which is:
(1) made primarily for personal, family or household
use; and
(2) secured by any first lien mortgage, deed of trust or
equivalent consensual security interest on a dwelling or on
residential real estate.
"Lease-purchase agreement." As follows:
(1) A deferred purchase of residential real estate by
which:
(i) an individual makes installment payments to the
seller of the dwelling or residential real estate; and
(ii) the seller retains title to the residential
real estate until some or all of the installment payments
are completed.
(2) The term does not include an agreement by which:
(i) an individual is not obligated to purchase the
dwelling or residential real estate; and
(ii) the final payment approximates the fair value
of the dwelling or residential real estate or the
anticipated fair value of the dwelling or residential
real estate and is not a nominal amount.
"Mortgage loan." Any first or secondary mortgage loan,
commercial mortgage loan, lease-purchase agreement or mortgage
loan modification.
"Mortgage loan business." The business of:
(1) advertising, causing to be advertised, soliciting,
negotiating or arranging in the ordinary course of business
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or offering to make or making mortgage loans; or
(2) servicing mortgage loans.
"Mortgage loan modification." An agreement that revises the
terms of an existing mortgage loan, including an agreement to
reduce mortgage loan payment amounts, balance or interest rate
or to waive any accrued or prospective mortgage loan charges.
The term does not include any agreement to refinance a mortgage
loan into a new mortgage loan.
"Mortgage servicer." A person who engages in the mortgage
loan business by directly or indirectly engaging in the service
of a mortgage loan.
"Qualified tenant." A commercial tenant of a property owned
or controlled by a person or entity receiving a mortgage loan
payment deferral under section 3 that has notified the landlord
of an inability to pay all or a portion of the rent due as a
result of a declaration by the Governor of disaster emergency
under 35 Pa.C.S. § 7301(c) (relating to general authority of
Governor).
"Secondary mortgage loan." A loan which is:
(1) made primarily for personal, family or household
use; and
(2) secured by any secondary lien mortgage, deed of
trust or equivalent consensual security interest on a
dwelling or on residential real estate.
"Secretary." The Secretary of Banking and Securities of the
Commonwealth.
"Service a mortgage loan." The collection or remittance of
payments for another or the right to collect or remit payments
for another of principal, interest, taxes, insurance and any
other payments pursuant to a mortgage loan.
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Section 3. Deferment program for mortgage payments.
During a declaration by the Governor of disaster emergency
under 35 Pa.C.S. § 7301(c) (relating to general authority of
Governor) and for 180 days after the expiration or termination
of the declaration by executive order, proclamation
or operation of law, a mortgage servicer that services a
mortgage loan under the jurisdiction of the secretary shall
develop a deferment program for mortgage loan borrowers in
accordance with the department's criteria under section 4(a)
that, at a minimum, provides for all of the following:
(1) Grants at least a 90-day deferment period of
mortgage loan payments for borrowers for each month the
mortgage loan is in deferment under a deferment program.
(2) Waives any late fee, processing fee or any other
fees accrued during the pendency of the disaster emergency.
This paragraph shall not apply to taxes or insurance
collected in accordance with a mortgage loan.
(3) Does not report to a credit bureau any delinquency
or other derogatory information that occurs as a result of
the deferment.
(4) Does not require the borrower to pay past due
mortgage payments due during the deferment period until, at
the earliest, the first month following the last month of the
original term of the mortgage loan.
(5) Beginning in the first month following the end of
the last month of the original term of the mortgage loan and
unless the borrower voluntarily contributes a greater amount,
allows a mortgage servicer to collect a monthly amount of no
more than the lesser of the following:
(i) Thirty-three percent of the full monthly
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mortgage rate due during the deferment period.
(ii) The total amount of past due mortgage payments
divided by the number of months of deferment granted to
the borrower under paragraph (1).
Section 4. Application criteria and procedures.
(a) Criteria.--No later than 45 days from the effective date
of this section, the department shall establish application
criteria and procedures and a standardized application form for
mortgage loan borrowers to apply for a deferment program under
section 3. The mortgage servicer shall make the application
available on a publicly accessible Internet website and via
telephone.
(b) Approvals.--A mortgage servicer shall approve an
application to participate in a deferment program under section
3 if the applicant:
(1) demonstrates to the mortgage servicer evidence of a
financial hardship resulting directly or indirectly from a
disaster emergency declared by the Governor under 35 Pa.C.S.
§ 7301(c) (relating to general authority of Governor) by
executing an affidavit of financial hardship. The department
shall develop the affidavit of financial hardship for the
purpose specified under this paragraph no later than 45 days
from the effective date of this section; and
(2) agrees in writing to pay the deferred mortgage loan
payments in accordance with the terms provided in section
3(5).
(c) Agreements.--Upon approving an application under
subsection (b), the mortgage servicer shall agree in writing to
all of the following:
(1) Freezing mortgage loan amortization during the
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deferment period.
(2) Extending the term of the mortgage loan by the same
number of days as the deferment period.
(3) Waiving principal and interest payments due to the
mortgage servicer during the deferment period without
financial penalty until the day following the last day of the
original term of the mortgage loan.
(4) Collecting tax and insurance payments during the
deferment period.
(d) Retention.--A mortgage servicer who receives an
application to participate in a deferment program under section
3 shall retain the application, whether approved or denied, for
at least three years after the final payment is made on the
mortgage loan or the mortgage loan is sold, whichever occurs
first. Upon request, the mortgage servicer shall make the
application available to the department.
(e) Prohibition.--A mortgage servicer may not require a
lump sum payment from any mortgage loan borrower making payments
under a deferment program under section 3.
(f) Denials.--A person or entity that submitted an
application to participate in a deferment program under section
3 and is denied participation may file a written complaint with
the department.
Section 5. Reduction of rent for qualified tenants.
A mortgage loan borrower that participates in a deferment
program under section 3(a) for a property occupied by a
qualified tenant shall agree in writing to reduce the rent
charged for the property to the qualified tenant during the
period of time when the mortgage payment deferral is in effect
in an amount proportional to the reduced mortgage amount paid by
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the mortgage loan borrower to the mortgage servicer during the
deferment period.
Section 6. Waivers during disaster emergencies.
To the necessary to conform with the provisions of this act,
the exceptions specified under 7 Pa.C.S. § 6112 (relating to
exceptions to license requirements) and provisions of 68 Pa.C.S.
§ 3315 (relating to lien for assessments) shall be waived for
the duration of a disaster emergency under 35 Pa.C.S. §
7301(c) (relating to general authority of Governor).
Section 7. Applicability.
This act shall not apply to a mortgage servicer that
initiated a foreclosure action or exercised the mortgage
servicer's right to accelerate the balance and maturity date of
the loan on or before March 11, 2020.
Section 8. Effective date.
This act shall take effect immediately.
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