May 10, 2016
by Lisa A. Lee
KML Law Group, P.C. – USFN Member (Pennsylvania)
On April 30, 2016 the Pennsylvania Housing Finance Agency (PHFA) published a public notice in the Pennsylvania Bulletin revising its Statement of Policy regarding the Homeowner’s Emergency Mortgage Assistance Program (HEMAP) and — most importantly — updating the form Act 91 notice that must be sent to the mortgagors and owners of mortgaged property prior to the commencement of most foreclosure actions involving non-FHA insured mortgages in Pennsylvania. The new form notice must be implemented by September 1, 2016.
The revised form Act 91 notice is significantly different from, and is much shorter than, the one that has been in place for the last eight years. A downloadable version of the new form notice is available at http://www.phfa.org/consumers/homeowners/hemap.aspx. In addition, the entire revised Statement of Policy, which includes the amendments to the regulations to Act 91, and the industry advisory letter from PHFA’s executive director can be viewed at the same link. While this article addresses some of the highlights of the Statement of Policy, amendments, and advisory information, all should be reviewed in their entirety.
The new form notice contains a first page that provides general information regarding the HEMAP program and some of the rights that the homeowner may have under Pennsylvania law and the loan documents. This information must be supplied in both English and Spanish every time. PHFA has also developed additional language translations (which are available at http://www.phfa.org/consumers/homeowners/hemap.aspx) for use in situations where the servicer knows that the mortgagor/homeowner requires communication in a language other than English or Spanish.
The last two pages of the new form notice comprise the Account Summary, which includes details regarding the account, the delinquency, and the cure amount, among other specific account level detail. The format of the Account Summary is designed to make the information easily digestible by the homeowner. Both PHFA’s Statement of Policy and the amended regulations are specific in that there are to be no deviations from the form of notice, and that no additional notices or information are to be combined with the notice.
PHFA’s Statement of Policy is also very clear that PHFA presumes that the date on the notice is also the date the notice was mailed. This date is very significant to the homeowner because it is the date that triggers the start of the time period for the homeowner to meet with a consumer credit counseling agency in order to be eligible for a further stay of proceedings to apply for HEMAP. If the date on the notice pre-dates the postmark of the notice, the date of the postmark will take precedence for purposes of determining the timeliness of the face-to-face meeting.
A list of PHFA-approved consumer credit counseling agencies must still be provided with each notice, as has always been required. The list must be specific to the county in which the mortgaged property is located, and must be the most updated list available on the agency’s website (see Appendix C at http://www.phfa.org/consumers/homeowners/hemap.aspx). The most recently published list as of the date of this writing was posted by PHFA on April 1, 2016. The agency will be updating the list periodically beginning in 2017 on certain published dates. The scheduled dates for the coming year will be provided by public notice in the Pennsylvania Bulletin prior to the end of each calendar year.
PHFA is also in the process of designing a fact sheet that servicers will be encouraged to transmit to delinquent mortgagors/homeowners prior to sending the Act 91 notice. This mailing will not be required by statute or regulation, but will be urged by the agency. When the fact sheet is published and available, further information will be provided to the industry.
Lastly, PHFA has also announced in the revised Statement of Policy that it will publish a yearly schedule of fees and costs which it considers to be reimbursable through a HEMAP loan. The schedule will be published on PHFA’s website, with the first one to be available prior to the end of 2016 and effective for calendar year 2017.
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