Pittsburgh Legal Back Talk

Legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus.

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Posted By Cliff Tuttle | August 14, 2012

No. 900

In June, Act 70 of 2012 funded the Pennsylvania Housing Finance Agency’s (PHFA) Homeowner’s Emergency Mortgage Assistance Program (HEMAP), which had been shut down for a year.  The mailing of Act 91 Notices by lenders to delinquent borrowers had been discontinued, since PHFA was not financially able to accept any new HEMAP applications.

This reversal of fortune is the result of the National Attorneys General Settlement with the five largest mortgage services which settled claims by participating states against the servicers for widespread practices such as robosigning. Pennsylvania’s share was placed into a Homeowner’s Assistance Settlement Fund, 90% of which was dedicated to HEMAP.

On August 8, 2012, Brian A. Hudson, Sr., Executive Director of PHFA wrote to the 67 County President Judges announcing that applications are being taken immediately for HEMAP loans and that a notice would appear in the Pennsylvania Bulletin on an expected publication date of August 18, 2012 announcing the reinstatement of Act 91 Notices, together with their mandatory provisions, On October 2, 2012.

“Beginning October 2, 2012,” Hudson stated,” all mortgages and mortgagees shall again be required to comply with all provisions of the HEMAP law and to provide the notices required by law (35 P.S. Section 1680.401 et seq.).”

In the meantime, Hudson requested that the Judges encourage persons going through the foreclosure process to apply to PHFA.  Those Counties which have diversion programs are also encouraged to provide stays so that foreclosure defendants can apply for HEMAP assistance.  A similar letter has been sent to Pennsylvania sheriffs.

A diversion program is a court supervised arrangement whereby foreclosure actions are delayed in order to give debtors an opportunity to propose a plan to lenders for mortgage modification or other relief. Philadelphia County established the first such program which, according to Mr. Hudson and many other observers, has been quite successful.  Allegheny County established the second program, which has mentored a significant number of modification agreements.  Butler County, Washington County and Fayette County also have diversion programs. Luzerne County is reportedly in the process establishing one, too.  However, the rest of the Commonwealth has not followed suit, leading some to call for a state-wide diversion program.

During the time when Act 91 was suspended, lenders and services have been required to send Act 6 Notices.  Act 6 of 1974 requires a notice containing specified information be sent to the homeowner at least 30 days prior to filing foreclosure.  Act 6 never actually went out of existence and because its scope includes residential property that is not owner-occupied, some properties (such as 1 – 4 family rental properties) may require Act 6 Notices but not Act 91 Notices.  To avoid confusion over which notice to send, the PHFA created a combined Act 91/Act 6 Notice.  The Act 91 Notice has been modified from time to time and was last changed in 2008, for use after January 1, 2009. It reflected 2008 amendments to Act 91 and sought to clarify certain existing provisions of the amended Act 91.

We will have to wait and see whether the Notice in the Pennsylvania Bulletin will make changes in the Act 91 Notice or procedures.



CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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