SENATE AMENDED
PRIOR PRINTER'S NOS. 1630, 1704, 1810, PRINTER'S NO. 4116
1871
No. 1426 Session of 1997
INTRODUCED BY J. TAYLOR, PETRONE, FARGO, FICHTER, GORDNER,
THOMAS, ROONEY, McCALL, E. Z. TAYLOR, LEDERER, DiGIROLAMO,
CARN, HALUSKA, SCRIMENTI, CORNELL, TIGUE, MANDERINO, KENNEY,
GRUITZA, YOUNGBLOOD, STURLA, OLASZ, SERAFINI, DeLUCA,
O'BRIEN, SAINATO, PRESTON, WOGAN, BELFANTI, TRICH, HENNESSEY,
MILLER, MELIO, L. I. COHEN, TRELLO, TANGRETTI, CORRIGAN,
M. COHEN, REINARD, CIVERA, PISTELLA, SURRA, CURRY, WALKO,
FLICK, BOSCOLA, RAMOS, HORSEY, WASHINGTON AND RAYMOND,
APRIL 29, 1997
SENATOR TILGHMAN, APPROPRIATIONS, IN SENATE, RE-REPORTED AS
AMENDED, NOVEMBER 16, 1998
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
1 borrow money upon its own credit by the issuance and sale of
2 bonds and notes and by giving security therefor, permitting
3 the refunding, redemption and purchase of such obligations by
4 the agency, prescribing remedies of holders of such bonds and
5 notes, exempting bonds and notes of the agency, the income
6 therefrom, and the income and revenues of the agency from
7 taxation, except transfer, death and gift taxes; making such
8 bonds and notes legal investments for certain purposes; and
9 indicating how the act shall become effective," further
10 providing for homeowner's emergency assistance.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Section 401-C(a) of the act of December 3, 1959
14 (P.L.1688, No.621), known as the Housing Finance Agency Law,
15 amended May 31, 1984 (P.L.364, No.73) and December 18, 1992
16 (P.L.1652, No.182), is amended to read:
17 Section 401-C. General Authority.--(a) The Pennsylvania
18 Housing Finance Agency, hereinafter referred to as the "agency,"
19 may make loans secured by liens on residential real property
20 located in Pennsylvania to residents of Pennsylvania eligible
21 for such loans as described in this article. For the purpose of
22 this article, the term "mortgage" shall include any obligation
23 evidenced by a security document and secured by a lien upon real
24 property located within this Commonwealth including, but not
25 limited to, a deed of trust and land sale agreement. The term
26 shall also include an obligation evidenced by a security lien on
27 real property upon which an owner-occupied mobile home is
28 located. The provisions of this article shall not be applicable
29 if:
30 (1) The property securing the mortgage is not the principal
31 residence of the mortgagor.
32 (2) The property securing the mortgage is not a one or two-
33 family owner-occupied residence.
34 (3) The mortgage is insured by the Federal Housing
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1 Administration under Title II of the National Housing Act (12
2 U.S.C. §§ 1707-1715z-18).
3 (4) The mortgage on the property was given by a noncorporate
4 seller, unless the noncorporate seller elects, in writing, in
5 the mortgage or elsewhere to be covered by this article. For
6 purposes of this article "noncorporate seller" means any person
7 [giving] who is given a mortgage by a buyer to secure repayment
8 of the purchase price of real property who is not a bank, a
9 savings and loan association, a mortgage bank, a consumer
10 discount company or other entity in the mortgage lending
11 business.
12 (5) The mortgagor is more than [thirty-six (36)] twenty-four
13 (24) months delinquent or in default for more than [thirty-six
14 (36)] twenty-four (24) months, pursuant to the terms of
15 mortgagor's residential mortgage. This requirement shall mean
16 that if the mortgagor is more than [thirty-six (36)] twenty-four
17 (24) consecutive or nonconsecutive months in arrears on the
18 residential mortgage in question, no matter what the reason
19 therefor, the agency shall not be authorized to make any loans
20 hereunder to such mortgagor.
21 (6) The aggregate amount of arrearages due to a mortgagee
22 pursuant to the terms of the mortgage, without regard to any
23 acceleration under the mortgage including, but not limited to,
24 the amount of principal, interest, taxes, assessments, ground
25 rents, hazard insurance, any mortgage insurance or credit
26 insurance premiums, exceeds the sum of sixty thousand dollars
27 ($60,000).
28 (7) If the property is encumbered by more than two
29 mortgages, other than a mortgage filed by the agency to secure
30 repayment of the mortgage assistance loans, or by other liens or
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1 encumbrances which would unreasonably impair the security of the
2 agency's mortgage.
3 * * *
4 Section 2. Section 403-C(f) of the act, added December 18, <--
5 1992 (P.L.1652, No.182), is amended to read:
6 Section 403-C. Notice Requirements.--* * *
7 (f) Notwithstanding any other provisions of this section, a
8 mortgagee shall not be required to send the uniform notice
9 provided in subsection (b) to any mortgagor who is more than
10 [thirty-six (36)] twenty-four (24) months delinquent or in
11 default for more than [thirty-six (36)] twenty-four (24) months,
12 pursuant to the terms of mortgagor's residential mortgage with
13 mortgagee. This requirement shall mean that if the mortgagor is
14 more than [thirty-six (36)] twenty-four (24) consecutive or
15 nonconsecutive months in arrears on the residential mortgage in
16 question, no matter what the reason therefor, he shall be
17 ineligible to receive the notice in subsection (b).
18 SECTION 2. SECTION 402-C OF THE ACT IS AMENDED BY ADDING A <--
19 SUBSECTION TO READ:
20 SECTION 402-C. NOTICE AND INSTITUTION OF FORECLOSURE
21 PROCEEDINGS.--* * *
22 (D) IF NOTICE IS GIVEN PURSUANT TO THIS SECTION AT LEAST
23 THIRTY (30) DAYS PRIOR TO TAKING ANY ACTION SPECIFIED IN THIS
24 SECTION AND SUCH NOTICE CONTAINS ALL OF THE INFORMATION
25 PRESCRIBED BY THE PROVISIONS OF THE ACT OF JANUARY 30, 1974
26 (P.L.13, NO.6), REFERRED TO AS THE LOAN INTEREST AND PROTECTION
27 LAW, THEN NO ADDITIONAL NOTICE SHALL BE REQUIRED PURSUANT TO
28 SECTION 403 OF THE LOAN INTEREST AND PROTECTION LAW.
29 SECTION 3 2. SECTION 403-C(A) (B) AND (F) OF THE ACT, <--
30 AMENDED OR ADDED MAY 31, 1984 (P.L.364, NO.73) AND DECEMBER 18,
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1 1992 (P.L.1652, NO.182), ARE AMENDED AND THE SECTION IS AMENDED
2 BY ADDING A SUBSECTION TO READ:
3 SECTION 403-C. NOTICE REQUIREMENTS.--(A) ANY MORTGAGEE WHO <--
4 DESIRES TO FORECLOSE UPON A MORTGAGE SHALL SEND TO SUCH
5 MORTGAGOR AT HIS OR HER LAST KNOWN ADDRESS THE NOTICE PROVIDED
6 IN SUBSECTION (B): PROVIDED, HOWEVER, THAT SUCH MORTGAGOR SHALL
7 BE AT LEAST SIXTY (60) DAYS CONTRACTUALLY DELINQUENT IN HIS
8 MORTGAGE PAYMENTS OR BE IN VIOLATION OF ANY OTHER PROVISION OF
9 SUCH MORTGAGE. IF NOTICE IS GIVEN PURSUANT TO THIS SECTION, AT
10 LEAST THIRTY (30) DAYS PRIOR TO TAKING ANY ACTION SPECIFIED IN
11 SECTION 402-C, AND SUCH NOTICE CONTAINS ALL OF THE INFORMATION
12 PRESCRIBED BY THE PROVISIONS OF THE ACT OF JANUARY 30, 1974
13 (P.L.13, NO.6), REFERRED TO AS THE LOAN INTEREST AND PROTECTION
14 LAW, THEN NO ADDITIONAL NOTICE SHALL BE REQUIRED PURSUANT TO
15 SECTION 403 OF THE LOAN INTEREST AND PROTECTION LAW.
16 * * *
17 SECTION 403-C. NOTICE REQUIREMENTS.--* * * <--
18 (B) [THE AGENCY SHALL PREPARE A UNIFORM NOTICE FOR PURPOSES
19 OF THIS SECTION AS FOLLOWS: THE NOTICE SHALL LIST CONSUMER
20 CREDIT COUNSELING AGENCIES AND SHALL] (1) THE AGENCY SHALL
21 PREPARE A NOTICE WHICH SHALL INCLUDE ALL THE INFORMATION
22 REQUIRED BY THIS SUBSECTION AND BY SECTION 403 OF THE ACT OF
23 JANUARY 30, 1974 (P.L.13, NO.6), REFERRED TO AS THE LOAN
24 INTEREST AND PROTECTION LAW. THIS NOTICE SHALL BE IN PLAIN
25 LANGUAGE AND SPECIFICALLY STATE THAT THE RECIPIENT OF THE NOTICE
26 MAY QUALIFY FOR FINANCIAL ASSISTANCE UNDER THE HOMEOWNER'S
27 EMERGENCY MORTGAGE ASSISTANCE PROGRAM. THIS NOTICE SHALL CONTAIN
28 THE TELEPHONE NUMBER AND THE ADDRESS OF A LOCAL CONSUMER CREDIT
29 COUNSELING AGENCY. THIS NOTICE SHALL BE IN LIEU OF ANY OTHER
30 NOTICE REQUIRED BY LAW. THIS NOTICE SHALL ALSO ADVISE THE
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1 MORTGAGOR OF HIS DELINQUENCY OR OTHER DEFAULT UNDER THE MORTGAGE
2 AND THAT SUCH MORTGAGOR HAS THIRTY (30) DAYS TO HAVE A FACE-TO-
3 FACE MEETING WITH THE MORTGAGEE WHO SENT THE NOTICE OR A
4 CONSUMER CREDIT COUNSELING AGENCY TO ATTEMPT TO RESOLVE THE
5 DELINQUENCY OR DEFAULT BY RESTRUCTURING THE LOAN PAYMENT
6 SCHEDULE OR OTHERWISE. [THE NOTICE]
7 (2) THE NOTICE UNDER PARAGRAPH (1) MUST BE SENT BY A
8 MORTGAGEE AT LEAST THIRTY (30) DAYS BEFORE THE MORTGAGEE:
9 (I) ASKS FOR FULL PAYMENT OF ANY MORTGAGE OBLIGATION; OR
10 (II) BEGINS ANY LEGAL ACTION, INCLUDING FORECLOSURE, FOR
11 MONEY DUE UNDER THE MORTGAGE OBLIGATION OR TO TAKE POSSESSION OF
12 THE MORTGAGOR'S SECURITY.
13 (3) THE PROPOSED NOTICE UNDER PARAGRAPH (1) SHALL BE
14 PUBLISHED BY THE AGENCY IN THE PENNSYLVANIA BULLETIN WITHIN ONE
15 HUNDRED TWENTY (120) DAYS OF THE EFFECTIVE DATE OF THIS
16 PARAGRAPH. THE NOTICE ACTUALLY ADOPTED FOR USE BY THE AGENCY
17 SHALL BE PROMULGATED AS PART OF THE PROGRAM GUIDELINES REQUIRED
18 BY SECTION 401-C(B).
19 (4) IF THE MORTGAGOR MEETS WITH A CONSUMER CREDIT COUNSELING
20 AGENCY, THE CONSUMER CREDIT COUNSELING AGENCY SHALL PROMPTLY
21 NOTIFY ALL OF THE MORTGAGEES SECURED BY THE MORTGAGOR'S REAL
22 PROPERTY, AND NO MORTGAGEE SO NOTIFIED SHALL COMMENCE ANY LEGAL
23 ACTION AGAINST THE MORTGAGOR'S REAL PROPERTY FOR A PERIOD NOT TO
24 EXCEED THIRTY (30) CALENDAR DAYS FROM THE DATE THAT THE
25 MORTGAGOR FIRST MEETS WITH THE CONSUMER CREDIT COUNSELING
26 AGENCY.
27 (5) THE NOTICE SHALL INCLUDE A STATEMENT THAT, IF THE
28 MORTGAGOR IS UNABLE TO RESOLVE THE DELINQUENCY OR DEFAULT WITHIN
29 THIRTY (30) CALENDAR DAYS OF THE MORTGAGOR'S FIRST CONTACT WITH
30 EITHER THE MORTGAGEE OR A CONSUMER CREDIT COUNSELING AGENCY, THE
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1 MORTGAGOR MAY APPLY TO THE AGENCY OR ITS DULY AUTHORIZED AGENT
2 AT THE ADDRESS AND PHONE NUMBER LISTED IN THE NOTICE IN ORDER TO
3 OBTAIN AN APPLICATION AND INFORMATION REGARDING THE HOMEOWNER'S
4 EMERGENCY MORTGAGE ASSISTANCE PROGRAM.
5 (6) IF THE MORTGAGOR APPLIES FOR MORTGAGE ASSISTANCE
6 PAYMENTS, THE AGENCY SHALL PROMPTLY NOTIFY ALL OF THE MORTGAGEES
7 SECURED BY THE MORTGAGOR'S REAL PROPERTY. THE AGENCY SHALL MAKE
8 A DETERMINATION OF ELIGIBILITY WITHIN SIXTY (60) CALENDAR DAYS
9 OF RECEIPT OF THE MORTGAGOR'S APPLICATION. DURING THE TIME THAT
10 THE APPLICATION IS PENDING, NO MORTGAGEE MAY COMMENCE LEGAL
11 ACTION TO FORECLOSE UPON ITS MORTGAGE WITH THE MORTGAGOR.
12 * * *
13 (F) NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS SECTION, A
14 MORTGAGEE SHALL NOT BE REQUIRED TO SEND THE UNIFORM NOTICE
15 PROVIDED IN SUBSECTION [(B) TO ANY MORTGAGOR WHO IS MORE THAN
16 THIRTY-SIX (36) MONTHS DELINQUENT OR IN DEFAULT FOR MORE THAN
17 THIRTY-SIX (36) MONTHS, PURSUANT TO THE TERMS OF MORTGAGOR'S
18 RESIDENTIAL MORTGAGE WITH MORTGAGEE. THIS REQUIREMENT SHALL MEAN
19 THAT IF THE MORTGAGOR IS MORE THAN THIRTY-SIX (36)] (B):
20 (1) TO ANY MORTGAGOR WHO IS MORE THAN TWENTY-FOUR (24)
21 CONSECUTIVE OR NONCONSECUTIVE MONTHS IN ARREARS ON THE
22 RESIDENTIAL MORTGAGE IN QUESTION, NO MATTER WHAT THE REASON
23 THEREFOR[, HE SHALL BE INELIGIBLE TO RECEIVE THE NOTICE IN
24 SUBSECTION (B).]; OR
25 (2) WHERE THE AGGREGATE AMOUNT OF ARREARAGES DUE TO A
26 MORTGAGEE PURSUANT TO THE TERMS OF THE MORTGAGE, WITHOUT REGARD
27 TO ANY ACCELERATION UNDER THE MORTGAGE INCLUDING, BUT NOT
28 LIMITED TO, THE AMOUNT OF PRINCIPAL, INTEREST, TAXES,
29 ASSESSMENTS, GROUND RENTS, HAZARD INSURANCE, ANY MORTGAGE
30 INSURANCE OR CREDIT INSURANCE PREMIUMS, EXCEEDS THE SUM OF SIXTY
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1 THOUSAND ($60,000) DOLLARS.
2 (G) NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS SECTION, A
3 MORTGAGEE SHALL NOT BE REQUIRED TO SEND THE UNIFORM NOTICE
4 PROVIDED IN SUBSECTION (B) TO ANY MORTGAGOR WHO HAS ALREADY BEEN
5 SENT THE UNIFORM NOTICE AND:
6 (1) WHO DID NOT APPLY FOR A MORTGAGE ASSISTANCE LOAN;
7 (2) WHO APPLIED FOR A MORTGAGE ASSISTANCE LOAN BUT WHOSE
8 APPLICATION WAS DENIED; OR
9 (3) WHOSE MORTGAGE ASSISTANCE DISBURSEMENTS WERE TERMINATED
10 BY THE AGENCY FOR ANY REASON.
11 UNLESS THE MORTGAGOR HAS CURED HIS OR HER MORTGAGE DELINQUENCY,
12 BY MEANS OF A MORTGAGE ASSISTANCE LOAN OR OTHERWISE, RECEIPT OF
13 PARTIAL PAYMENTS OF ARREARS FROM THE MORTGAGOR, SUBSEQUENT TO
14 THE SENDING OF THE UNIFORM NOTICE, SHALL NOT MEAN THAT THE
15 MORTGAGEE MUST SEND A NEW UNIFORM NOTICE TO THE MORTGAGOR PRIOR
16 TO LEGAL ACTION BEING TAKEN TO ENFORCE THE MORTGAGE. A UNIFORM
17 NOTICE SENT TO THE MORTGAGOR, WHILE THE MORTGAGOR WAS IN
18 BANKRUPTCY, SHALL BE VALID FOR THE PURPOSE OF THIS ACT AND NO
19 NEW UNIFORM NOTICE NEED BE PROVIDED AS A RESULT OF ANY DISCHARGE
20 OR DISMISSAL OF THE BANKRUPTCY PETITION OR RELIEF FROM THE
21 AUTOMATIC STAY.
22 Section 3 4 3. Section 404-C(a) of the act, amended May 31, <--
23 1984 (P.L.364, No.73) and December 18, 1992 (P.L.1652, No.182),
24 is amended to read:
25 Section 404-C. Eligibility for Assistance.--(a) No
26 assistance may be made with respect to a mortgage or mortgagor
27 under this article unless all of the following are established:
28 (1) The property securing the mortgage, or other security
29 interest in the case of units in cooperative or condominium
30 projects, is a one-family residence, or two-family owner-
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1 occupied residence including one-family units in a condominium
2 project or a membership interest and occupancy agreement in a
3 cooperative housing project, is the principal residence of the
4 mortgagor and is located in this Commonwealth.
5 (2) (i) Any mortgagee has indicated to the mortgagor its
6 intention to foreclose; and
7 (ii) payments under any mortgage have been contractually
8 delinquent for at least sixty (60) days.
9 (3) The mortgage is not insured by the Federal Housing
10 Administration under Title II of the National Housing Act (12
11 U.S.C. §§ 1707-1715z-18).
12 (4) The mortgagor is a permanent resident of this
13 Commonwealth and is suffering financial hardship due to
14 circumstances beyond the mortgagor's control which render the
15 mortgagor unable to correct the delinquency or delinquencies
16 within a reasonable time and make full mortgage payments.
17 (5) The agency has determined that there is a reasonable
18 prospect that the mortgagor will be able to resume full mortgage
19 payments within [thirty-six (36)] twenty-four (24) months after
20 the beginning of the period for which assistance payments are
21 provided under this article and pay the mortgage or mortgages in
22 full by its maturity date or by a later date agreed to by the
23 mortgagee or mortgagees for completing mortgage payments.
24 (6) The mortgagor has applied to the agency for assistance
25 on an application form prescribed by the agency for this use
26 which includes a financial statement disclosing all assets and
27 liabilities of the mortgagor, whether singly or jointly held,
28 and all household income regardless of source. Any applicant who
29 intentionally misrepresents any financial information in
30 conjunction with the filing of an application for assistance
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1 under this article may be denied assistance or required to
2 immediately repay any amount of assistance made as a result of
3 such misrepresentation, and the mortgagee may, at any time
4 thereafter, take any legal action to enforce the mortgage
5 without any further restrictions or requirements under this
6 article.
7 (7) The mortgagee is not prevented by law from foreclosing
8 upon the mortgage.
9 (8) The agency has determined, based on the mortgagor's
10 financial statement, that the mortgagor has insufficient
11 household income or net worth to correct the delinquency or
12 delinquencies within a reasonable period of time and make full
13 mortgage payments.
14 (9) Except for the current delinquency, the mortgagor shall
15 have had a favorable residential mortgage credit history for the
16 previous five (5) years. This requirement shall mean that, if
17 the mortgagor has been more than three (3) consecutive months in
18 arrears on a residential mortgage within the previous five (5)
19 years, he shall be ineligible for assistance, unless the
20 mortgagor can demonstrate that the prior delinquency was the
21 result of financial hardship due to circumstances beyond his
22 control.
23 (10) For purposes of this section, in order to determine
24 whether the financial hardship is due to circumstances beyond
25 the mortgagor's control, the agency may consider information
26 regarding the mortgagor's employment record, credit history and
27 current income.
28 (11) The mortgagor meets any other procedural requirements
29 established by the agency.
30 (12) The mortgagor is not more than [thirty-six (36)]
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1 twenty-four (24) months delinquent or in default for more than
2 [thirty-six (36)] twenty-four (24) months pursuant to the terms
3 of mortgagor's residential mortgage. This requirement shall mean
4 that if the mortgagor is more than [thirty-six (36)] twenty-four
5 (24) consecutive or nonconsecutive months in arrears on the
6 residential mortgage in question, no matter what the reason
7 therefor, he shall be ineligible for assistance.
8 (13) The property is not encumbered by more than two
9 mortgages, other than a mortgage filed by the agency to secure
10 repayment of the mortgage assistance loan, or by other liens or
11 encumbrances which would unreasonably impair the security of the
12 agency's mortgage.
13 * * *
14 Section 4 5 4. Sections 405-C(a), (b), (f) and (g), 406-C <--
15 and 408-C of the act, added December 23, 1983 (P.L.385, No.91),
16 are amended to read:
17 Section 405-C. Assistance Payments.--(a) If the agency
18 determines that a mortgagor is eligible for assistance under
19 this article, the agency shall pay directly to each mortgagee
20 secured by the mortgagor's real estate payments on behalf of the
21 mortgagor. The agency shall pay to each mortgagee the full
22 amount then due to that mortgagee pursuant to the terms of the
23 mortgage without regard to any acceleration under the mortgage,
24 or the full amount of any alternate mortgage payments agreed to
25 by the mortgagee and mortgagor. This amount shall include, but
26 not be limited to, the amount of principal, interest, taxes,
27 assessments, ground rents, hazard insurance, any mortgage
28 insurance or credit insurance premiums. The initial payment made
29 by the agency to each mortgagee shall be an amount which makes
30 each mortgage current and pays reasonable costs and reasonable
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1 attorneys' fees already incurred by such mortgagee. However, in
2 no event shall the total payment exceed the sum equal to twenty-
3 four (24) consecutive or nonconsecutive months of arrears on any
4 residential mortgage.
5 (b) After the agency has paid any and all arrearages
6 pursuant to subsection (a) to each mortgagee, the mortgagor may
7 be entitled to monthly mortgage assistance payments pursuant to
8 this article. A mortgagor on whose behalf the agency is making
9 mortgage assistance payments shall pay monthly payments to the
10 agency. Such payments shall be in an amount which will cause the
11 mortgagor's total housing expense not to exceed [thirty-five
12 (35)] forty (40) percent of the mortgagor's net effective
13 income. This shall be the maximum amount the mortgagor can be
14 required to pay during the [thirty-six (36) months] period a
15 mortgagor is eligible for emergency mortgage assistance[.]:
16 Provided, however, That beginning July 1, 1997, and continuing
17 thereafter, any mortgagor approved for continuing monthly
18 mortgage assistance or whose continuing mortgage assistance is
19 approved after being recertified by the agency, shall pay to the
20 agency a minimum monthly payment of at least twenty-five ($25)
21 dollars for each mortgage being assisted. The mortgagor shall
22 make the above payment to the agency at least [seven (7)]
23 fifteen (15) days before each mortgage payment is due to each
24 mortgagee. Upon receipt of this payment from the mortgagor, the
25 agency or its duly authorized agent shall send the total
26 mortgage payment directly to each mortgagee. "Housing expense"
27 shall be defined as the sum of the mortgagor's monthly
28 [maintenance,] utility, hazard insurance expense, real estate
29 taxes and required mortgage payments, including escrows. "Net
30 effective income" shall be defined as gross household income
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1 less city, State and Federal income and social security taxes.
2 "Gross household income" means the total income of [a husband,
3 wife] the applicant, all other owner-occupants of the residence,
4 any spouse and children residing in the same household as the
5 applicant and any other resident of the household declared by
6 the mortgagor as a dependent for Federal tax purposes. The
7 income of other unrelated individuals residing in the household
8 shall be considered part of gross household income to the extent
9 that their income is made available in support of the household.
10 If the mortgagor is receiving emergency mortgage assistance
11 under a program other than that established in this article, the
12 amount of the payment he or she is required to make to the
13 agency under this article shall take into consideration the
14 amount of assistance he is receiving under such other programs.
15 * * *
16 (f) Payments under this article shall be provided for a
17 period not to exceed [thirty-six (36)] twenty-four (24) months,
18 either consecutively or nonconsecutively[.], whether such
19 payments are on account of arrears, continuing monthly
20 assistance or any combination thereof, and shall not exceed the
21 sum of sixty thousand ($60,000) dollars on behalf of any
22 mortgagor. The agency shall establish procedures for periodic
23 review of the mortgagor's financial circumstances for the
24 purpose of determining the necessity for continuation,
25 termination or adjustment of the amount of the payments.
26 Payments shall be discontinued when the agency determines that,
27 because of the changes in the mortgagor's financial
28 circumstances, the payments are no longer necessary in
29 accordance with the standards set forth in section 404-C.
30 (f.1) The twenty-four (24) month limit on assistance
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1 available under this act established in subsection (f), and
2 referenced in sections 401-C(a)(5), 403-C(f) and 404-C(a)(5) and
3 (12), shall increase to thirty-six (36) months if during the <--
4 month the homeowner submits an application for assistance, the
5 average rate of total unemployment in the Commonwealth, as
6 seasonally adjusted, for the period consisting of the most
7 recent three (3) months for which such data for the Commonwealth
8 is published before the close of such month equals or exceeds
9 six and one-half (6.5) percent. FOR THE CALENDAR YEAR <--
10 IMMEDIATELY FOLLOWING ANY CALENDAR YEAR IN WHICH THE AVERAGE,
11 SEASONALLY ADJUSTED, RATE OF TOTAL UNEMPLOYMENT IN THIS
12 COMMONWEALTH, AS RECORDED BY THE DEPARTMENT OF LABOR AND
13 INDUSTRY, EQUALS OR EXCEEDS SEVEN AND ONE-HALF (7.5) PERCENT FOR
14 THAT ENTIRE CALENDAR YEAR. BY JANUARY 31 OF EACH CALENDAR YEAR,
15 THE PENNSYLVANIA HOUSING FINANCE AGENCY SHALL PUBLISH IN THE
16 PENNSYLVANIA BULLETIN THE AVERAGE, SEASONALLY ADJUSTED, RATE OF
17 TOTAL UNEMPLOYMENT IN THIS COMMONWEALTH FOR THE PRIOR CALENDAR
18 YEAR. ALL APPLICATIONS RECEIVED ON OR AFTER JANUARY 1 OF ANY
19 CALENDAR YEAR BY THE PENNSYLVANIA HOUSING FINANCE AGENCY FOR
20 ASSISTANCE UNDER ARTICLE IV-C OF THIS ACT SHALL BE SUBJECT TO
21 THE LIMIT ON ASSISTANCE IN EFFECT FOR THAT CALENDAR YEAR.
22 (f.2) Every five (5) years, beginning in the year 2003, the
23 General Assembly shall review the limit on the total assistance
24 available under this act established in subsection (f) and the
25 minimum monthly payment established in subsection (b). The
26 General Assembly may increase either or both upon a showing that
27 increases in housing costs require higher loan amounts in order
28 for the act to be beneficial to homeowners in all regions of the
29 Commonwealth.
30 (g) Repayment of amounts owed to the agency from a mortgagor
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1 shall be secured by a mortgage lien on the property and by such
2 other obligation as the agency may require. The priority of any
3 lien obtained by the agency under this article shall be
4 determined in the same manner as the lien of a general secured
5 creditor of the mortgagor. The lien or other security interest
6 of the agency shall not be deemed to take priority over any
7 other secured lien or secured interest in effect against the
8 mortgagor's property on the date assistance payments begin. The
9 agency may allow subordination of the mortgage assistance lien
10 if such subordination is necessary to permit the mortgagor to
11 obtain a home improvement loan for repairs necessary to preserve
12 the property.
13 (h) In cases of joint mortgagors who are husband and wife,
14 where only one spouse who is an occupant of the mortgaged
15 premises makes application for and receives assistance under
16 this article, the lien to secure repayment as aforesaid shall be
17 a lien on the property of like force and effect as a mechanic's
18 lien.
19 Section 406-C. Repayment.--Upon approval of mortgage
20 assistance, the agency shall enter into an agreement with the
21 mortgagor for repayment of all mortgage assistance made by the
22 agency plus interest as provided in paragraph (5). The agreement
23 shall provide for monthly payments by the mortgagor and be
24 subject to the following [forbearance] provisions:
25 (1) If the mortgagor's total housing expense as defined in
26 section 405-C is less than [thirty-five (35)] forty (40) percent
27 of his or her net effective income, the mortgagor shall pay to
28 the agency the difference between [thirty-five (35)] forty (40)
29 percent of the mortgagor's net effective income and the
30 mortgagor's total housing expense unless otherwise determined by
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1 the agency after examining the mortgagor's financial
2 circumstances and ability to contribute to repayment of the
3 mortgage assistance.
4 (2) If the mortgagor's total housing expense is more than
5 [thirty-five (35)] forty (40) percent of his or her net
6 effective income, repayment of the mortgage assistance shall be
7 deferred until the mortgagor's total housing expense is less
8 than [thirty-five (35)] forty (40) percent of his or her net
9 effective income[.]: Provided, however, That beginning July 1,
10 1997, and continuing thereafter, any mortgagor who has received
11 mortgage assistance shall pay to the agency a minimum monthly
12 repayment of at least twenty-five ($25) dollars for each
13 mortgage that was assisted. Such minimum monthly repayment shall
14 not result in the accrual of interest on the mortgage assistance
15 loan pursuant to paragraph (5).
16 (2.1) The forty (40) percent ratio established under
17 subsections (1) and (2) shall be reduced to thirty-five (35)
18 percent if during the month the homeowner submits an application <--
19 for assistance the average rate of total unemployment in the
20 Commonwealth, as seasonally adjusted, for the period consisting
21 of the most recent three (3) months for which such data for the
22 Commonwealth is published before the close of such month equals
23 or exceeds six and one-half (6.5) percent. PERCENT FOR NEW <--
24 APPLICATIONS RECEIVED DURING A CALENDAR YEAR IN WHICH THE LIMIT
25 ON ASSISTANCE IS THIRTY-SIX (36) MONTHS PURSUANT TO THE
26 PROVISIONS OF SECTION 405-C(F.1).
27 (3) If repayment of mortgage assistance is not made by the
28 date any mortgage is paid, the mortgagor shall make mortgage
29 assistance repayments in an amount not less than the mortgage
30 payment until the mortgage assistance is repaid.
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1 (4) The agency shall establish procedures for periodic
2 review of the mortgagor's financial circumstances to determine
3 the amounts of repayment required under this section.
4 Notwithstanding any other provision of this section, the agency
5 shall require full or partial repayment of the mortgage
6 assistance loan once the mortgagor has established credit to the
7 extent that there is sufficient equity in the property for the
8 mortgagor to be able to refinance their mortgage obligations at
9 reasonable rates and terms as determined by the agency.
10 (5) Interest shall accrue on all mortgage assistance made by
11 the agency at the rate of nine (9) percent per annum. Interest
12 shall start to accrue whenever the mortgagor begins to make
13 repayment under this section. Interest shall accrue only during
14 the period in which the mortgagor is required to make repayment
15 under this section. When any mortgage for which mortgage
16 assistance was made is paid, interest shall then accrue on all
17 mortgage assistance due and owing at the same rate and on the
18 same basis as the mortgage for which the mortgage assistance was
19 made.
20 (6) All moneys received from mortgagors for repayment of
21 mortgage assistance shall be deposited in the State Homeowner's
22 Emergency Mortgage Assistance Fund established by the agency for
23 the sole purpose of implementing the provisions of this article.
24 Section 408-C. Homeowner's Emergency Mortgage Assistance
25 Fund.--The Homeowner's Emergency Mortgage Assistance Fund is
26 hereby created as a separate account within the agency for the
27 sole purpose of implementing the provisions of this article. No
28 other agency funds, moneys or interest earnings shall be
29 utilized for the purposes of this article. [The Homeowner's
30 Emergency Mortgage Assistance Fund shall only be utilized by the
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1 agency whenever funds are specifically authorized and
2 appropriated by the General Assembly pursuant to section 410-C
3 of this article for the purposes provided for in this article.
4 All moneys paid by mortgagors to the agency to repay loans
5 provided by the agency shall be accounted for and lapsed into or
6 transferred back to the source from which the funds are
7 appropriated unless the funds cannot be lapsed or transferred
8 pursuant to any other act of the General Assembly: Provided,
9 however, That investment] Investment and interest earnings on
10 moneys from this fund may be used by the agency for the
11 administrative costs of the program. The Homeowner's Emergency
12 Mortgage Assistance Fund shall operate as a revolving loan fund
13 to which shall be credited all repayment of principal and
14 interest by mortgagors to the agency to repay loans provided by
15 the agency pursuant to this article, as well as grants or
16 donations from other sources and any funds that may be
17 appropriated by the General Assembly.
18 Section 5 6 5. Section 410-C of the act is repealed. <--
19 Section 6 7. This act shall take effect in 60 days. <--
20 SECTION 6. THIS ACT SHALL TAKE EFFECT IMMEDIATELY. <--
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