PRIOR PRINTER'S NO. 528 PRINTER'S NO. 1585
No. 486 Session of 2007
INTRODUCED BY BROWNE, FERLO, BOSCOLA, TOMLINSON, ERICKSON, RAFFERTY, RHOADES, COSTA, BAKER AND STACK, MARCH 15, 2007
SENATOR PIPPY, URBAN AFFAIRS AND HOUSING, AS AMENDED, NOVEMBER 28, 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
1 indicating how the act shall become effective," further 2 providing for the Homeowner's Emergency Assistance Program, <-- 3 GENERAL AUTHORITY, for notice and institution of foreclosure <-- 4 proceedings, for notice requirements, for assistance payments 5 and for repayment; and providing for an ongoing foreclosure 6 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 1. SECTIONS 401-C(D) AND 402-C(B) OF THE ACT OF <-- 13 DECEMBER 3, 1959 (P.L.1688, NO.621), KNOWN AS THE HOUSING 14 FINANCE AGENCY LAW, ADDED DECEMBER 23, 1983 (P.L.385, NO.91), 15 ARE AMENDED TO READ: 16 SECTION 401-C. GENERAL AUTHORITY.--* * * 17 (D) THE AGENCY SHALL DESIGNATE AND APPROVE NONPROFIT 18 CONSUMER CREDIT COUNSELING AGENCIES IN EACH COUNTY TO BE 19 AVAILABLE TO ASSIST THE AGENCY IN IMPLEMENTING THE PROVISIONS OF 20 THIS ARTICLE, INCLUDING, BUT NOT LIMITED TO, MANDATED 21 COUNSELING. A "CONSUMER CREDIT COUNSELING AGENCY" SHALL BE 22 DEFINED FOR THE PURPOSE OF THIS ARTICLE AS A NONPROFIT CONSUMER 23 CREDIT COUNSELING AGENCY LOCATED IN PENNSYLVANIA WHICH IS 24 APPROVED BY THE AGENCY OR A HOUSING COUNSELING AGENCY CERTIFIED 25 BY THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN 26 DEVELOPMENT. THE AGENCY SHALL MAINTAIN AN UP-TO-DATE LIST OF 27 APPROVED CONSUMER CREDIT COUNSELING AGENCIES FOR EACH COUNTY AND 28 PUBLISH THE LIST ON THE AGENCY'S INTERNET WEBSITE. 29 Section 402-C. Notice and Institution of Foreclosure 30 Proceedings.--* * * 31 (b) A mortgagee shall not accelerate the maturity of any 32 mortgage obligation covered under this article, commence any 20070S0486B1585 - 2 -
1 legal action including mortgage foreclosure to recover under 2 such obligation, or take possession of any security of the 3 mortgage debtor for such mortgage obligation until a final 4 determination has been made by the agency on a mortgagor's 5 application for emergency mortgage assistance payments or the 6 applicable time periods provided for in section 403-C have 7 expired without the mortgagor applying for assistance in a 8 timely fashion, whichever is earlier. A final determination may 9 not be made by the agency until the conclusion of any timely 10 administrative appeal that may have been filed with the agency. 11 * * * 12 Section 2. Section 403-C(b) of the act, amended December 21, 13 1998 (P.L.1248, No.160), is amended to read: 14 Section 403-C. Notice Requirements.--* * * 15 (b) (1) The agency shall prepare a notice which shall 16 include all the information required by this subsection and by 17 section 403 of the act of January 30, 1974 (P.L.13, No.6), 18 referred to as the Loan Interest and Protection Law, and 19 referred to commonly as the Usury Law. This notice shall be in 20 plain language and specifically state that the recipient of the 21 notice may qualify for financial assistance under the 22 Homeowner's Emergency Mortgage Assistance Program. [This notice <-- 23 shall contain the telephone number and the address of a local 24 consumer credit counseling agency.] <-- 25 (1.1) The notice shall contain, but not be limited to, the 26 following information: 27 (i) The name of the mortgagor and the address of the 28 mortgaged premises, including the property tax identification 29 number and the account number. 30 (ii) The name and address of the servicer of the mortgage, 20070S0486B1585 - 3 -
1 with a toll-free telephone number, facsimile number, electronic 2 mail address and contact person's name, and the name and address 3 of the holder of the mortgage. If the holder is a loan trust, 4 the name and address of the trustee and the name of the trust in 5 which the particular mortgage is included. 6 (iii) The date the loan was originated, the name of the 7 originating lender, the original principal amount of the loan, 8 the interest rate on the loan or, if a variable rate, the rate 9 that was effective when the loan was originated and the fact 10 that it is a variable rate. 11 (iv) A list of consumer credit counseling agencies which 12 have been approved by the agency only for the county in which 13 the mortgaged premises is located, including their addresses and 14 telephone numbers. The agency shall maintain an up-to-date list 15 of approved consumer credit counseling agencies for each county 16 and publish the list on the agency's Internet website. A 17 reference to the agency's Internet website shall also be 18 included in the notice. 19 (v) Any other information determined by the agency. 20 (1.2) This notice shall be in lieu of any other notice 21 required by law. This notice shall also advise the mortgagor of 22 his delinquency or other default under the mortgage including an 23 itemized breakdown of the total amount past due and that such 24 mortgagor has thirty (30) days, plus three (3) days for mailing, 25 to have a face-to-face meeting with [the mortgagee who sent the 26 notice or] a consumer credit counseling agency to attempt to 27 resolve the delinquency or default by restructuring the loan 28 payment schedule or otherwise. The mortgagee or other person 29 sending the notice to the mortgagor shall simultaneously send a 30 copy of each notice issued to the agency by regular mail, 20070S0486B1585 - 4 -
1 facsimile, electronic mail or another means of electronic 2 transfer in accordance with agency guidelines. In lieu of 3 sending a copy of each notice, the mortgagee or other person 4 charged with sending the notice may provide the agency with <-- 5 statistical information on a monthly basis as to the number of 6 notices sent pursuant to this act and pursuant to section 403 of 7 the Usury Law. This information shall be broken down by county 8 and census tract., WITHIN 30 DAYS OF THE END OF EACH CALENDAR <-- 9 QUARTER, A REPORT LISTING THE NOTICES SENT DURING THE PRIOR 10 CALENDAR QUARTER ARRANGED BY PROPERTY ADDRESS INCLUDING ZIP 11 CODE. 12 (2) The notice under paragraph (1) must be sent by a 13 mortgagee at least thirty (30) days before the mortgagee: 14 (i) asks for full payment of any mortgage obligation; or 15 (ii) begins any legal action, including foreclosure, for 16 money due under the mortgage obligation or to take possession of 17 the mortgagor's security. 18 (3) The proposed notice under paragraph (1) shall be 19 published by the agency in the Pennsylvania Bulletin within one 20 hundred twenty (120) days of the effective date of this 21 paragraph. The notice actually adopted for use by the agency 22 shall be promulgated as part of the program guidelines required 23 by section 401-C(b). 24 (4) If the mortgagor meets with a consumer credit counseling 25 agency, the consumer credit counseling agency shall promptly 26 notify all of the mortgagees secured by the mortgagor's real 27 property, and no mortgagee so notified shall commence any legal 28 action against the mortgagor's real property for a period not to 29 exceed thirty (30) calendar days from the date that the 30 mortgagor first meets with the consumer credit counseling 20070S0486B1585 - 5 -
1 agency. 2 (5) [The notice shall include a statement that, if the 3 mortgagor is unable to resolve the delinquency or default within 4 thirty (30) calendar days of the mortgagor's first contact with 5 either the mortgagee or a consumer credit counseling agency, the 6 mortgagor may apply to the agency or its duly authorized agent 7 at the address and phone number listed in the notice in order to 8 obtain an application and information regarding the Homeowner's 9 Emergency Mortgage Assistance Program.] The notice shall include 10 a statement that the mortgagor must have a face-to-face meeting 11 with one of the designated consumer credit counseling agencies 12 within thirty (30) calendar days plus three (3) additional days 13 for mailing. The purpose of this meeting shall be to attempt to <-- 14 negotiate a forbearance agreement to resolve the delinquency or 15 default. If unable to do so, the mortgagor may then proceed with 16 an application for a homeowner's emergency mortgage assistance 17 loan. 18 (6) If the mortgagor applies for mortgage assistance 19 payments, the agency shall promptly notify all of the mortgagees 20 secured by the mortgagor's real property. The agency shall make 21 a determination of eligibility within sixty (60) calendar days 22 of receipt of the mortgagor's application. During the time that 23 the application is pending, including any timely administrative <-- 24 appeal filed with the agency in connection therewith, no 25 mortgagee may commence legal action to foreclose upon its 26 mortgage with the mortgagor. The agency shall provide notice to 27 the mortgagee if an administrative appeal is filed. 28 (7) An application for mortgage assistance may be submitted 29 to the agency beyond the thirty (30)-day period specified in 30 paragraph (5), and in such case, the agency shall make a 20070S0486B1585 - 6 -
1 determination within sixty (60) calendar days of receipt of the 2 mortgagor's application. A late application or an administrative 3 appeal will not stay foreclosure proceedings, but in the event 4 the application is approved by the agency, a commenced 5 foreclosure proceeding shall be stayed UNLESS AND UNTIL THE <-- 6 MORTGAGOR FAILS TO PROCEED TO CLOSING AND THE AGENCY RESCINDS 7 ITS APPROVAL. 8 * * * 9 Section 3. Section 405-C(e) of the act, added December 23, 10 1983 (P.L.385, No.91), is amended and the section is amended by 11 adding subsections to read: 12 Section 405-C. Assistance Payments.--* * * 13 (a.1) A mortgagee entitled to payments under this section 14 shall provide to the agency within thirty (30) days of the 15 agency's request the following documents and information: 16 (1) An itemized statement of the amounts due under the 17 mortgage including all corporate advances incurred for which 18 reimbursement from the mortgagor is demanded by the mortgagee. 19 Demands for attorney fees, court costs and other advances shall 20 be reasonable and shall reflect the amount of work and expenses 21 actually expended and may not include any amounts incurred 22 during any period a stay is in effect under this act. 23 (2) Copies of the following documents from the original 24 mortgage transaction: 25 (i) The HUD-1 settlement statement. 26 (ii) The mortgage and note. 27 (iii) The appraisal, if an appraisal has been performed 28 during the last five (5) years. 29 (a.2) Failure to provide in a timely fashion the documents 30 and information required under subsection (a.1) will result in 20070S0486B1585 - 7 -
1 the mortgagee's forfeiture of the right to receive any late fees 2 and attorney fees, costs and expenses. 3 (a.3) Upon the agency's payment of the initial payment to 4 the mortgagee, including all corporate advances allowed by the 5 agency, the mortgagee shall adjust its accounts to reflect that 6 the mortgage obligation is, as of the date of receipt of such 7 funds, reinstated and current for all purposes. The subsequent 8 imposition by a mortgagee of any charges, fees or other amounts 9 that were paid or disallowed by the agency, or waived by the 10 mortgagee, shall be in violation of the act of December 17, 1968 11 (P.L.1224, No.387), known as the "Unfair Trade Practices and 12 Consumer Protection Law." 13 * * * 14 (b.1) In lieu of paying arrearages under subsection (a) or 15 ongoing assistance under subsection (b), the agency may fund a 16 compromise pay-off of the balance of the mortgage, if the agency 17 determines that structuring assistance in such a manner would be 18 in the best interest of the agency and the mortgagor, AS AGREED <-- 19 TO BY THE MORTGAGEE. 20 * * * 21 (e) If any mortgagee scheduled to receive monthly payments 22 from the agency pursuant to this article fails to receive from 23 the agency the full amount of such monthly payment within thirty 24 (30) days of the scheduled due date, or if a mortgagor fails to 25 observe and perform all the terms, covenants and conditions of 26 the mortgage, that mortgagee may, at any time thereafter, take 27 any legal action to enforce the mortgage without any further 28 restriction or requirement under this article. 29 * * * 30 Section 4. Section 406-C(5) of the act, amended December 21, 20070S0486B1585 - 8 -
1 1998 (P.L.1248, No.160), is amended to read: 2 Section 406-C. Repayment.--Upon approval of mortgage 3 assistance, the agency shall enter into an agreement with the 4 mortgagor for repayment of all mortgage assistance made by the 5 agency plus interest as provided in paragraph (5). The agreement 6 shall provide for monthly payments by the mortgagor and be 7 subject to the following provisions: 8 * * * 9 (5) Interest shall accrue on all mortgage assistance made by 10 the agency at [the rate of nine (9) percent per annum.] a rate 11 of interest to be determined by the agency prior to the end of 12 each calendar year for loans closed in the next calendar year, 13 which rate shall not exceed the interest rate established by the 14 Department of Banking pursuant to section 301 of the act of 15 January 30, 1974 (P.L.13, No.6), referred to as the Loan 16 Interest and Protection Law, and referred to commonly as the 17 Usury Law. Interest shall start to accrue whenever the mortgagor 18 begins to make repayment under this section. Interest shall 19 accrue only during the period in which the mortgagor is required 20 to make repayment under this section. When any mortgage for 21 which mortgage assistance was made is paid, interest shall then 22 accrue on all mortgage assistance due and owing at the same rate 23 and on the same basis as the mortgage for which the mortgage 24 assistance was made. 25 * * * 26 Section 5. The act is amended by adding a section to read: 27 Section 412-C. Ongoing Foreclosure Study.--The agency shall 28 monitor foreclosure activity and trends in this Commonwealth, 29 using data and information accumulated from notices and 30 applications for assistance processed under this article, and 20070S0486B1585 - 9 -
1 shall, as appropriate, provide recommendations for addressing 2 any problems identified in this monitoring effort. 3 Section 6. This act shall take effect in 60 days. B2L64MSP/20070S0486B1585 - 10 -