Current through Register Vol. 54, No. 49, December 7, 2024
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 accordance with the guidance and form set forth in Appendix A and subject to the following requirements: (1) The notice is comprised of a one-page English language version with a Spanish language version on the reverse side. Following is an Account Summary which shall be completed by the mortgagee and which must contain all relevant account and default information. The form of notice is set forth in Appendix A. The form in Appendix A includes embedded instructions on format and fonts, which mortgagees should not include in final prepared notices to homeowners. The form in Appendix A may be available in downloadable form on the Agency's web site at www.phfa.org.(2) Except for the entry of the date at the top of each page and the entry of the relevant homeowner account information on the Account Summary, the notice shall be sent without modification or alteration of its form or substance. The notice may not appear on company letterhead. Other changes including formatting changes to font or type size or the alteration of language contained in the body of the notice are not permitted.(3) The portion of the notice entitled Account Summary may be amended to include the relevant homeowner's complete account information only. The mortgagee may increase or decrease the height of cells within the table to accommodate the homeowner account information specifically indicated. In no circumstance may a mortgagee add or remove any additional fields or cells. Fields that do not apply to a homeowner's account shall be filled "Not Applicable" or "N/A."(4) Each notice must include the English and Spanish language versions set forth in Appendix A, with the Spanish language version appearing on the reverse side of the English language version. In addition to the required mailing of the English and Spanish versions set forth in Appendix A, mortgagees are encouraged to send other translated versions of the first page of the notice when reasonably necessary. Several alternative language versions of the notice are available on the Agency's web site at www.phfa.org. Mortgagees are also encouraged to ensure information is available to homeowners who have limited English proficiency. Mortgagees are reminded that they are required to provide accommodations for persons with disabilities as may be required by law.(5) Each notice must include the list of consumer credit counseling agencies as updated periodically on the Agency's web site at www.phfa.org. While this list of counseling agencies will be continuously available on the Agency's web site, a schedule of maintenance updates to the list will be provided by the Agency on an annual basis in the Pennsylvania Bulletin. It is the Agency's intention that the annual notice be provided to the industry to reflect new addresses, updates in contact information and other timely adjustments to the list. Mortgagees are expected to check the Agency's web site on the scheduled dates to ensure they are providing the most current counseling agency contact information in the notice. Counseling agencies shall provide the Agency with any updates to mailing addresses, phone numbers and any other pertinent updates as these changes occur.(6) The notice shall be sent: (i) By first class mail to the last known address of all homeowners and, if different, the residence which is the subject of the mortgage.(ii) By registered or certified mail.(iii) Without any other information or materials.(iv) If using a window mailing envelope, with either of the following:(A) An addressed single sheet of plain, white paper.(B) A mailing insert containing either the last known address of the homeowner or the residence which is the subject of the mortgage.(7) 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. When the original mortgagor is deceased, mortgagees are encouraged to send the notice to the mortgaged premises at the point that mortgage payments are at least 60 days contractually delinquent.(8) 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.(9) 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.(10) 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.(11) A notice sent under this subchapter, in the form prescribed in Appendix A, shall be instead 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. §§ 101-605), known as the Usury Law.(b) When the homeowner has been sent a notice as required under 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 date printed on the notice, plus an additional 3 days to allow for mailing period. The Agency presumes that the date printed on the notice is the same as the postmark date of the notice. When the date printed on the notice and the postmark date are not the same as determined by the Agency, the later date will be used to measure the timeliness of the face-to-face meeting.(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 stated 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 encourages the mortgagee to advise the homeowner of this provision at the time any loss mitigation or 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. A homeowner may file 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 eligibility determination under a mortgage obligation 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 § 31.209 (relating to appeals). 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 12/14/1985, 15 Pa.B. 4435; amended July 1, 1994, effective 7/2/1994, 24 Pa.B. 3224; amended June 4, 1999, effective 7/1/1999, 29 Pa.B. 2859; amended August 29, 2008, effective 9/6/2008, 38 Pa.B. 4859; amended April 29, 2016, effective 4/30/2016, 46 Pa.B. 2171. This section cited in 12 Pa. Code § 31.210 (relating to periods of high unemployment).