§ 31.206. Reasonable prospect of resuming mortgage payments and paying mortgage by maturity.
(a) In general, the Agency will consider all relevant factors when evaluating whether the homeowner has a reasonable prospect of being able to resume full mortgage payments within 24 months after the beginning of the period for which assistance payments are provided the Agency and of being able to pay the mortgage in full by maturity or by a later date agreed to by the mortgagee, including the following:
(1) The homeowner’s prior work history, experience, training, opportunities for retraining and similar factors which may affect the homeowner’s future employment opportunities.
(2) Potential for future changes in the homeowner’s financial prospects through re-employment, schooling, training or debt reduction, or other income changes sufficient to enable the homeowner to resume full mortgage payments.
(3) Noncash benefits that may reduce household expenses, such as food stamps, free medical services for military or low-income families, a company-provided automobile, or receipt of food or clothing from family members living outside the household.
(4) Changes in income or recurring expenses, or both, that may be affected by changes in the age, composition or employment of members of the household.
(5) Potential for repayment of short-term or installment debt.
(6) Delinquencies in other debts which seriously jeopardize continued ownership of the home, which cannot be cured by a mortgage assistance loan.
(7) A homeowner’s demonstrated ability to make regular monthly mortgage payments, even though those payments represented most of the homeowner’s income. In determining whether the homeowner’s future job and income prospects will be sufficient to enable the homeowner to pay the mortgage debt—including principal, interest, taxes and insurance—the Agency will take into consideration the amount of household income available to the homeowner for a reasonable period of time not to exceed 24 months prior to the circumstances which caused the mortgage delinquency and whether the income was sufficient as evidenced by documentation, including tax returns, Internal Revenue Service Form W-2 and tax transcripts. If a homeowner is not required to file taxes, certification of this fact is mandatory at the time of application. In cases when nontaxable income is earned or financial government benefits are received, documentation evidencing receipt of the income or benefits shall be provided.
(b) The Agency will generally determine that a homeowner demonstrates a reasonable prospect of resuming mortgage payments and paying the mortgage by maturity, despite his current unemployment, if the homeowner is suffering a financial hardship through no fault of his own and can demonstrate the following:
(1) A favorable work and credit history.
(2) The ability and history of paying the mortgage when employed.
(3) The lack of an impediment or disability that prevents reemployment.
(4) That he is actively seeking work, as evidenced by a written statement to that effect.
(c) When the homeowner attributes the mortgage default to alcoholism or other chemical dependency and claims that the dependency impaired his ability to handle financial obligations, the homeowner shall provide the Agency with a physician’s written diagnosis of the dependency condition and documentation of a pattern of behavior which supports the homeowner’s claim. The Agency will not consider rehabilitation efforts in determining whether the circumstances were beyond the mortgagor’s control, but will consider these efforts in evaluating the homeowner’s reasonable prospects of resuming mortgage payments.
(d) A mortgage will not be assisted unless installments of principal and interest due under the mortgage are structured so that the loan is fully amortized by regular and periodic payments over a designated period of time. A mortgage in which the balance is due upon demand or the balance is due in a lump sum or balloon payment at the end of a term is not eligible for mortgage assistance except as follows:
(1) In cases where the homeowner is in need of a noncontinuing loan to pay arrearages due, the loans are only eligible if the lump sum or balloon payment is not due or the demand for payment has not been made prior to the Agency’s disbursement of funds.
(2) In cases where the homeowner is in need of continuing monthly mortgage assistance disbursements, the loans are only eligible if the lump sum or balloon payment comes due or the demand may be made more than 24 months after the beginning of the period for which assistance payments are provided the Agency.
(3) When the homeowner and mortgagee agree to reamortize the mortgage debt or extend the maturity date.
(e) The homeowner shall provide sufficient information to allow the Agency to assess the homeowner’s future ability to pay the mortgage debt. The Agency will base its decision on the information received from the homeowner or other sources. The lack of sufficient information from the homeowner which is reasonably available to the homeowner, or the receipt of knowingly false or misleading information from the homeowner may result in a denial of the application on the merits.
Notes of Decisions Re-employment
The hearing examiner did not err as a matter of law in denying the application for mortgage assistance based on his conclusion that the applicant’s future income was speculative, where there was no evidence as to when the applicant could expect to earn $280,000 to $330,000 per year from the practice of law, or why he has been essentially unsuccessful in these endeavours since his return to work. R. M. v. Housing Finance Agency, 740 A.2d 302 (Pa. Cmwlth. 1999); appeal denied 754 A.2d 390 (Pa. 2000).
Statement of Policy
This section is a statement of policy, not a regulation, and thus it does not have the force and effect of law, since the Housing Finance Agency has consistently classified this section as a ‘‘statement of policy,’’ since the substantive content of the four factors favors a finding that this section does not create a binding norm, since the fact that the hearing examiner relied upon the criteria of this section is not particularly probative on whether the section is substantive, and since the agency is free to consider in toto the four factors, as well as other factors, and then, based on that guidance and their own judgment, decide whether an applicant is qualified for mortgage assistance. R. M. v. Housing Finance Agency, 740 A.2d 302 (Pa. Cmwlth. 1999); appeal denied 759 A.2d 390 (Pa. 2000).
Source The provisions of this § 31.206 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 April 29, 2016, effective April 30, 2016, 46 Pa.B. 2171. Immediately preceding text appears at serial pages (336313) to (336315).
Cross References This section cited in 12 Pa. Code § 31.204 (relating to Agency review); and 12 Pa. Code § 31.210 (relating to periods of high unemployment).
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