Section 31.203. Notice; application procedures

(a) Before a mortgagee accelerates the maturity of a mortgage obligation, commences legal action including mortgage foreclosure to recover under the obligation, or takes possession of a security of the mortgage debtor for the mortgage obligation, the mortgagee is required to give notice in the form set forth in Appendix A, subject to the following requirements:

(1) The notice shall be sent by first class mail to the last known address of the homeowner and if different, to the residence which is the subject of the mortgage. The notice shall also be sent by registered or certified mail.

(2) The notice should be sent at the point the homeowner is at least 60 days contractually delinquent in his mortgage payments or is in violation of other provisions of the mortgage.

(3) A mortgagee is not required to send the notice required by this subchapter (unless the homeowner has cured his mortgage delinquency, by means of a mortgage assistance loan or otherwise) as follows:

(i) To homeowners who do not qualify for mortgage assistance under § 31.202(a), (b) or (c) (relating to eligibility for mortgage loan assistance).

(ii) To homeowners who are more than 24 months delinquent or in default for more than 24 months under the terms of the mortgage.

(iii) If the aggregate amount of arrearages due to a mortgagee pursuant to the terms of the mortgage, without regard to any acceleration under the mortgage including the amount of principal, interest, taxes, assessments, ground rents, hazard insurance, any mortgage insurance or credit insurance premiums, exceeds the sum of $60,000.

(iv) To a homeowner who has already been sent the notice and who did not apply for a mortgage assistance loan, or who applied for a mortgage assistance loan but whose application was denied, or whose mortgage assistance disbursements were terminated by the Agency for any reason.

(4) Unless the homeowner has cured his mortgage delinquency, by means of a mortgage assistance loan or otherwise, receipt of partial payments of arrears from the homeowner, subsequent to the sending of the notice, does not mean that the mortgagee shall send a new notice to the homeowner prior to legal action being taken to enforce the mortgage.

(5) A notice sent to the homeowner, while the homeowner was in bankruptcy, shall be valid and no new notice need be provided as a result of any discharge or dismissal of the bankruptcy petition or relief from the automatic stay.

(6) A notice sent under this subchapter, in the form prescribed in Appendix A, shall be in lieu of any other notice required by State law. If notice is not required to be sent under this subchapter, the mortgagee may still be required to send the 30-day notice required by the act of January 30, 1974 (P. L. 13, No. 6) (41 P. S. § § 401—605), known as the Usury Law.

(b) When the homeowner has been sent a notice as required by this subchapter—see Appendix A—by the lender holding the mortgage, the following apply:

(1) The homeowner shall arrange for and attend a face-to-face meeting with a consumer credit counseling agency listed in the notice. The meeting shall be held within 30 days of the postmark date of the notice, plus an additional 3 days to allow for mailing period. For example, a notice mailed on March 9 is presumed to have been delivered on March 12. Therefore, the homeowner shall hold a face-to-face meeting within 30 days of March 12, or on or before April 11.

(2) If the homeowner meets with a consumer credit counseling agency within the period specified in paragraph (1), notice of the holding of and date of the meeting shall be given within 5 business days of the meeting by the consumer credit counseling agency to known mortgagees holding a mortgage on the principal residence of the homeowner. For the purpose of this subchapter, it is the obligation of the mortgagor to notify the consumer credit counseling agency of the name and address of all mortgagees. A mortgagee may not pursue legal action against the homeowner’s property if the homeowner meets with the consumer credit counseling agency within 33 days of the postmark date of the notice and for an additional period of 30 days subsequent to the meeting between the homeowner and the consumer credit counseling agency, while the application is being prepared to be sent to the Agency. A mortgagee may not proceed with legal action against the homeowner once an application has been approved by the Agency and shall cooperate with the Agency in obtaining reinstatement figures and executing a reinstatement agreement.

(3) The consumer credit counseling agency notice—see Appendix B—to the mortgagee will indicate that the homeowner intends to apply for homeowner’s emergency mortgage assistance payments.

(4) If after a face-to-face meeting, the homeowner/ mortgagor and mortgagee reach an agreement to resolve the delinquency or default as mentioned in paragraph (1) and if, because of circumstances beyond the homeowner’s control, the homeowner is unable to fulfill the obligations of that agreement, the homeowner may apply to the Agency or its authorized agent for homeowner’s emergency mortgage assistance payments within 30 days of a default in payment under the agreement previously reached. The mortgagee is not required to send an additional notice under this provision. The Agency suggests that the mortgagee advise the homeowner of this provision at the time the forbearance agreement is arranged. If a consumer credit counseling agency is involved, the counseling agency shall notify both the homeowner and the mortgagee of this provision at the time the forbearance agreement is arranged.

(5) An application for assistance may only be obtained from a consumer credit counseling agency. The consumer credit counseling agency will assist the homeowner in preparing and submitting an application. This application shall be postmarked or filed at the offices of the Agency or at a location designated by the Agency within 30 days of the initial meeting between the homeowner and the consumer credit counseling agency.

(6) If the consumer credit counseling agency assists the homeowner in the preparation or submittal of an application for assistance, it will, within 5 business days, inform the known mortgagees of the date of the application submittal.

(7) If the homeowner does apply to the Agency, the Agency will notify known mortgagees holding a mortgage on the principal residence of the homeowner of the receipt of the application.

(8) The Agency will determine eligibility for assistance within 60 days of receipt of the application, during which time no mortgagee may pursue legal action to foreclose upon the mortgage on the homeowner’s principal residence.

(9) Within 5 business days of making the determination of the eligibility for assistance, the Agency will notify known mortgagees as to whether the application has been approved, disapproved or if funds are not available. If the mortgagee does not receive this notice of disposition or determination within 60 days—plus 5 business days for notification—of receipt of the application by the Agency, or if the notice indicates the application has been disapproved, the applicant was determined to be ineligible for assistance or that funds are not available, the mortgagees may then take legal action to enforce the mortgage.

(10) If after receiving an Appendix A notice the homeowner cures the delinquency or default with or without mortgage assistance from the Agency and the homeowner subsequently becomes more than 60 days delinquent, the mortgagee shall again provide the Appendix A notice before taking legal action.

(11) If the homeowner fails to meet with an approved consumer credit counseling agency within the period specified or fails to meet other time limitations in this subchapter, the mortgagee may take legal action to enforce the mortgage provided, however, that an application for mortgage assistance may be submitted beyond the time periods specified (that is, a ‘‘late application’’) and in that case the Agency will make a determination within 60-calendar days of receipt of the application. A late application will not prevent the lender from starting and pursuing a foreclosure action, but if the application is eventually approved at any time before a sheriff’s sale, the foreclosure must be stopped.

(12) If the Agency determines that the applicant does not qualify for assistance, the following apply:

(i) The applicant may not reapply for assistance for 24 months from the date of determination under a mortgage unless there is a material change in the applicant’s financial circumstances.

(ii) An applicant who is denied a mortgage assistance loan may request an administrative hearing under § 31.207 (relating to repayment). This request does not prohibit a mortgagee from pursuing legal action to enforce the mortgage.

(c) Payments under this subchapter shall be provided for a period not to exceed 24 months, either consecutively or nonconsecutively, whether the payments are on account of arrears, continuing monthly assistance or any combination thereof, and may not exceed the sum of $60,000 on behalf of any mortgagor.

The provisions of this § 31.203 amended December 13, 1985, effective December 14, 1985, 15 Pa.B. 4435; amended July 1, 1994, effective July 2, 1994, 24 Pa.B. 3224; amended June 4, 1999, effective July 1, 1999, 29 Pa.B. 2859; amended August 29, 2008, effective September 6, 2008, 38 Pa.B. 4859. Immediately preceding text appears at serial pages (256730) to (256733).

Notation

Notes of Decisions

Due Process

Administrative hearing provided after agency decision, which revised prior agency determination of qualification for mortgage assistance, satisfied due process consistent with Kentucky Fried Chicken of Altoona, Inc. v. Unemployment Compensation Board of Review, 10 Pa. Commw. 90, 309 A.2d 165 (1973). Hessler v. Housing Finance Agency, 500 A.2d 914 (Pa. Cmwlth. 1985).

Notice

Submission of Act 91 Notice is not required for emergency mortgage assistance because this section did not require its submission. Vianello v. Housing Finance Agency, 562 A.2d 441 (Pa. Cmwlth. 1989); appeal denied 575 A.2d 573 (Pa. 1990).

Cross References

This section cited in 12 Pa. Code § 31.210 (relating to periods of high unemployment).