Opinion
No. 1619 C.D. 2014
04-14-2015
Carol Williams, Petitioner v. Pennsylvania Housing Finance Agency, Respondent
BEFORE: HONORABLE BERNARD L. McGINLEY, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE McCULLOUGH
Carol Williams (Petitioner), proceeding pro se, petitions for review of the August 29, 2014 adjudication of the Pennsylvania Housing Finance Agency (Agency) denying her application for emergency mortgage assistance under the act known as the Homeowner's Emergency Mortgage Assistance Loan Program (HEMAP or Act 91). We affirm.
Act of December 3, 1959, P.L. 1688, added by the Act of December 23, 1983, P.L. 385, as amended, 35 P.S. §§1680.401c-1680.410c.
In 1998, Petitioner and her husband purchased a residence for $65,000 and obtained a mortgage in that amount. In 1999, Petitioner and her husband were legally separated and have lived independently ever since. Petitioner has resided and continues to reside in the residence, and her husband does not contribute to the mortgage payments because the two do not share expenses. Petitioner worked as a dispatcher for approximately eleven years, but her employment was terminated in June of 2010. Thereafter, Petitioner collected unemployment compensation benefits for one year, and, in 2011, she began receiving Supplemental Security Income (SSI) benefits due to multiple disabilities, including osteoporosis, diabetes, and neuropathy of the lower extremities. From 2011 to the present, Petitioner's sole source of income is SSI benefits in the amount of $790 per month. (Supplemental Reproduced Record (S.R.R.) at 27b-39b, 52b-54b.)
On February 20, 2014, the mortgage lender sent Petitioner an "Act 91 Notice," advising her that several monthly mortgage payments had not been made and that the mortgage was in default. Petitioner then filed a HEMAP loan application with the Agency, which the Agency received on May 8, 2014. By letter dated May 29, 2014, the Agency denied Petitioner's application, concluding, in relevant part, that Petitioner had no reasonable prospect of resuming full mortgage payments within 36 months from the date of the delinquency and paying the mortgage in full by the maturity date. (S.R.R. at 7b-20b.)
The purpose of an Act 91 notice is to instruct the mortgagor of different means she may use to resolve her arrearages in order to avoid foreclosure on her property, and it also gives her a timetable in which such means must be accomplished. Section 403-C of Act 91, 35 P.S. §1680.403c. Specifically, the Act 91 notice informs the mortgagor of the availability of financial assistance through HEMAP. 35 P.S. §1680.403c(b)(1). Act 91 further states that if the mortgagor and mortgagee reach an agreement and thereafter the mortgagor is again unable to make payment, "[t]he mortgagee shall not be required to send any additional notice pursuant to this article." 35 P.S. §1680.403c(d).
As explained infra, this is a statutory requirement to receive HEMAP assistance.
Petitioner appealed, and an Agency Examiner (Examiner) held a hearing. By decision dated August 29, 2014, the Examiner affirmed the initial Agency determination. The Examiner made the following relevant facts and legal conclusions:
[Petitioner] stated that she suffers from neuropathy in her legs and feet, osteoporosis, fibromyalgia, diabetes, arthritis in her knees and bronchial problems. She stated she is in constant pain. [Petitioner] began receiving SSI benefits in 2011. She has no deductions for Medicare and receives $790 per month.
[Petitioner] states that she has been able to maintain the monthly mortgage payments of $646 because she received assistance from the [Federal] Emergency Homeowners' Loan Program which ended at the end of December 2013. [Petitioner] received [from this program] $17,181.49 in mortgage assistance or approximately 31 months' assistance. The mortgage remains delinquent from January 2014 and [Petitioner] has no funds saved to apply toward the mortgage delinquency. [Petitioner] stated she can never resume full mortgage payments of $646.
The monthly mortgage payment of $646 does not include an escrow account for the payment of real estate taxes and homeowner's insurance. The mortgage lender paid the real estate taxes and homeowner's insurance a month ago. [Petitioner] has been notified that effective October 2014, her monthly mortgage payment will increase to over $1,000.
According to [her] testimony, [Petitioner] is hopeful she can receive mortgage assistance from [HEMAP] for the full 36 months. If she does receive 36 months of assistance, she will sell the home at the end of the assistance and move into a high rise apartment. [Petitioner] stated [that] she must be 60 years of age to qualify [for residency in the apartment].
[Petitioner] was asked to list the normally occurring monthly expenses on the application when she met with the
Counseling Agency. The expenses that were listed totaled [$1,971 at the time of the hearing]. . . .(S.R.R. at 3b-4b.)
[Petitioner's] [n]et monthly income of $790 is insufficient to meet [her] total monthly expenses of $1,971. . . . In October 2014, when the monthly mortgage payment increases to over $1,000, [Petitioner's] income of $790 will be insufficient to pay the mortgage payment alone. In this context, the mortgage assistance loan was properly denied [because] [t]otal debt indicates [that there is] no reasonable prospect of [Petitioner] resuming full mortgage payments within thirty-six (36) months from the date of the mortgage delinquency and paying the mortgage(s) by maturity.
[Petitioner] has been receiving SSI benefits since 2011. She is unable to increase her income through employment due to the fact that she suffers from [disabilities]. She states she is in constant pain [and] can never resume full monthly mortgage payments. Therefore, the mortgage assistance loan was properly denied [because there is] no reasonable prospect of [Petitioner] resuming full mortgage payments within thirty-six (36) months from the date of the mortgage delinquency and paying the mortgage(s) by maturity based on: [Petitioner's] income is insufficient to maintain mortgage. [She] is on a fixed income and unable to work due to illness.
On appeal to this Court, Petitioner asserts that the Agency erred in concluding that there was no reasonable prospect she would be able to resume full mortgage payments within 36 months because the Examiner "doesn't know what [she] can pay in 36 months or if [she] can be healed." (Petitioner's brief at 7.) Petitioner also contends that she should qualify for HEMAP assistance on the ground that she told the Examiner that she would sell her home at the end of 36 months of assistance and move into a high-rise facility for individuals age 60 and above.
Our review of the Agency's denial of an application for a HEMAP loan is limited to determining whether substantial evidence supports the Agency's findings of fact or whether the Agency committed an error or law or violated the applicant's constitutional rights. Fish v. Pennsylvania Housing Finance Agency, 931 A.2d 764, 767 n.3 (Pa. Cmwlth. 2007).
An applicant for emergency mortgage assistance through HEMAP has the burden of establishing the facts necessary to qualify. Koch v. Pennsylvania Housing Finance Agency, 505 A.2d 649, 651 (Pa. Cmwlth. 1986).
Section 404-c(a)(5) of HEMAP provides:
(a) No assistance may be made with respect to a mortgage or mortgagor under this article unless all of the following are established:35 P.S. §1680.404c(a)(5). Pursuant to section 405c(f.1) of HEMAP, the 24-month period in section 404-c(a)(5) of HEMAP is extended to 36 months when the unemployment rate, as calculated under a specified formula, exceeds 6.5 percent. The parties do not dispute that the 36-month term is applicable in this case.
* * *
(5) The agency has determined that there is a reasonable prospect that the mortgagor will be able to resume full mortgage payments within twenty-four (24) months after the beginning of the period for which assistance payments are provided under this article and pay the mortgage or mortgages in full by its maturity date or by a later date agreed to by the mortgagee or mortgagees for completing mortgage payments.
This provision states:
The twenty-four (24) month limit on assistance available under this act established in subsection (f) and referenced in sections 401-C(a)(5), 403-C(f) and 404-C(a)(5) and (12) [35 P.S. §§1680.401c(a)(5), 1680.403c(f) and 1680.404c(a)(3) and (a)(12)] shall increase to thirty-six (36) months if during the month the homeowner submits an application for assistance the average rate of total unemployment in the Commonwealth, as seasonally adjusted, for the period consisting of the most recent three (3) months for which such data for the Commonwealth is published before the close of such month equals or exceeds six and one-half (6.5) percent.
It is well settled that a hearing examiner cannot consider "speculative income" that an applicant may make in the future when determining whether the applicant satisfies the requirements of section 404-c(a)(5) of HEMAP. R.M. v. Pennsylvania Housing Finance Agency, 740 A.2d 302, 308 (Pa. Cmwlth. 1999); Cullins v. Pennsylvania Housing Finance Agency, 623 A.2d 951, 954-55 (Pa. Cmwlth. 1993). Accordingly, a hearing examiner does not abuse his discretion or commit an error of law when the applicant's evidence of future income is speculative and/or legally insufficient to demonstrate that there is a reasonable probability that the mortgage payments will resume and the mortgage will be paid off in a timely fashion. See R.M., 740 A.2d at 308 (concluding that although applicant presented evidence that he had significant earning potential, the applicant failed to present evidence as to when he could expect to earn this income; therefore, "[i]t was reasonable for the hearing examiner to conclude that [the applicant's] future income was speculative" and "the hearing examiner did not err as a matter of law in denying [the] application for mortgage assistance."); Cullins, 623 A.2d at 954-55 (stating that "the Agency cannot base its determination on speculative income;" determining that the applicant's evidence failed to establish that she would be guaranteed hours by an employer and that future employment was merely a possibility; and concluding from these premises that the hearing examiner did not err in considering the applicant's only source of guaranteed income and financial debt and finding that the applicant was disqualified under section 404-c(a)(5) of HEMAP).
Here, the Examiner found that Petitioner had no reasonable prospect of resuming mortgage payments in 36 months and satisfying the mortgage debt by its maturity date because her monthly expenses and mortgage payment dramatically exceed her income and she is unable to work due to illness. (S.R.R. at 4b.) Significantly, Petitioner did not adduce any evidence - even speculative evidence - to suggest that she could obtain employment and/or the financial wherewithal to meet the statutory requirements of section 404-c(a)(5) of HEMAP. Absent such evidence, the Examiner had no factual basis upon which to conclude that she could. Therefore, given this record, the Examiner did not err in determining that Petitioner was ineligible for HEMAP assistance. See R.M., 740 A.2d at 308; Cullens, 623 A.2d at 954-55. See also Mull v. Pennsylvania Housing Finance Agency, 529 A.2d 1185, 1188 (Pa. Cmwlth. 1987) (concluding that the hearing examiner did not err in determining that there was no reasonable prospect of applicant resuming mortgage payments within the required time frame where the applicant's income was insufficient to meet her monthly expenses).
Moreover, even though Petitioner purportedly promised to sell her home if she were granted, and later expended, 36 months of HEMAP assistance, this does not alter the fact that she failed to meet the requirements of section 404-c(a)(5) of HEMAP. 35 P.S. §1680.404c(a). The statute simply does not provide any exceptions to the mandatory statutory requirements that need to be fulfilled in order for an applicant to receive HEMAP assistance.
Based on the foregoing discussion, we conclude that the Examiner did not abuse his discretion or err as a matter of law in denying Petitioner a HEMAP loan pursuant to section 404-c(a)(5). Accordingly, we affirm.
/s/_________
PATRICIA A. McCULLOUGH, Judge ORDER
AND NOW, this 14th day of April, 2015, the August 29, 2014 adjudication of the Pennsylvania Housing Finance Agency is affirmed.
/s/_________
PATRICIA A. McCULLOUGH, Judge
35 P.S. §1680.405c(f.1), added by Section 4 of the Act of December 21, 1998, P.L. 1258.