Bowman v. PHFA – Cmwlth. Court –
November 14, 2017 – unreported memorandum opinion*
Held:
Applicant not eligible for HEMAP mortgage assistance. Substantial
evidence supported findings that a)
there was no reasonable prospect that applicant would be able to resume full
mortgage payments within 24 month, or b) that she was suffering from financial
hardship due to circumstances beyond her control.
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*An unreported
Commonwealth Court case may not be cited binding precedent but can be cited for
its persuasive value. See 210 Pa.
Code § 69.414(b) and Pa. R.A.P.
3716
If the case is
old, the link may have become stale and may not work, but you can use the case
name, court, and date to find the opinion in another source (e.g., Westlaw,
Lexis, Google Scholar)
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Comments by Peter Schneider of CLS
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Comments by Peter Schneider of CLS
This
is an interesting decision. HEMAP denial was affirmed on the basis that there
was no reasonable prospect of resuming payments, but Commonwealth Court
disagreed with the hearing examiner’s finding that hardship was not beyond
borrower’s control:
B. Financial Hardship
Petitioner’s failure to satisfy the reasonable prospect element
of Act 91 is
dispositive of her application for a HEMAP loan. However, we write
briefly to
highlight the errors the Hearing Examiner made when considering the
issue of
financial hardship.
Act 91 provides that the mortgagor must establish that she “is
suffering
financial hardship due to circumstances beyond the mortgagor’s
control which
render the mortgagor unable to correct the delinquency or
delinquencies within a
reasonable time and make full mortgage payments.” 35 P.S. §
1680.404c(a)(4). Act
91 does not define the phrase “circumstances beyond the
mortgagor’s control.”
However, Act 91 indicates that PHFA “may consider information
regarding the
mortgagor’s employment record, credit history and current
income.” 35 P.S.
§ 1680.404c(a)(10). On the issue of the mortgagor’s employment
record, PHFA’s
HEMAP Policy Statement adds that “[u]nemployment or
underemployment,
through no fault of the homeowner” are examples of circumstances
beyond the
mortgagor’s control that result in financial hardship to the
mortgagor. 12 Pa. Code.
§ 31.205(b)(1).10
In contrast, PHFA will not consider “[t]ermination of employment
by the homeowner without a necessitous cause or termination of
the homeowner’s
employment by an employer for willful misconduct” to be
circumstances beyond the
mortgagor’s control. 12 Pa. Code § 31.205(c)(2). Section 31.205
of the Policy
Statement does not define “necessitous cause” or “willful
misconduct.” However,
these same terms appear in Section 402(b) and (e) of the
Unemployment
Compensation (UC) Law.11
In concluding that Petitioner did not suffer a financial
hardship due to
circumstances beyond her control, the Hearing Examiner found
both that Petitioner
“voluntarily terminated” her position with Human Services and
that she was “forced
to resign.” (Examiner’s Decision at 2, 6.) These findings are
inconsistent. See Pa.
Liquor Control Bd. v. Unemployment Comp. Bd. of Review, 648 A.2d
124, 126 (Pa.
Cmwlth. 1994) (noting that an employee who resigns in order to
avoid an imminent
discharge has not voluntarily resigned but has been discharged
and is entitled to UC
benefits if she has not committed willful misconduct). If
Petitioner was forced to
resign in order to avoid an imminent discharge and did not
commit an act of willful
misconduct, it may have been that the termination of her
employment with Human
Services was through no fault of her own, and the loss of that
employment, in
combination with the death of her mother and the resultant loss
of $1,500 a month
in rental income, constituted a financial hardship due to
circumstances beyond
Petitioner’s control. Thus, had Petitioner not failed to
satisfy the reasonable prospect
element, we would have remanded this matter for the Hearing Examiner
to resolve
this inconsistency on the issue of financial hardship.
9 A mortgagor may reapply for assistance from PHFA if “there is
a material change in
circumstances.” 35 P.S. §1680.404c(b).
10 We have never held that 12 Pa. Code § 31.205 is a statement
of policy and not a
regulation, but, as noted, we have held that the section that
follows it, 12 Pa. Code § 31.206, is a
statement of policy, and all of subchapter B of chapter 31 of
the Pennsylvania Code, which
addresses HEMAP, is referred to as a “policy statement.”
11 Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897,
as amended, 43 P.S.
§ 802(b), (e).
