IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Eric M. O’Brien, :

Petitioner :

:

v. : No. 2089 C.D. 2015

: Submitted: March 4, 2016

Pennsylvania Housing Finance Agency, :

Respondent :

BEFORE: HONORABLE ROBERT SIMPSON, Judge

HONORABLE MICHAEL H. WOJCIK, Judge

HONORABLE DAN PELLEGRINI, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION 

BY JUDGE SIMPSON FILED: April 18, 2016

Eric M. O’Brien (Homeowner), representing himself, petitions for 

review of an order of the Pennsylvania Housing Finance Agency (Agency) that 

denied his application for emergency mortgage assistance under the act known as 

the Homeowner’s Emergency Mortgage Assistance Loan Program (HEMAP or 

Act 91).1 The Agency denied Homeowner’s application for a HEMAP loan on the 

ground that Homeowner’s mortgage delinquency could not be attributed to 

circumstances beyond his control. Homeowner contends the Agency erred in 

denying his loan application on the basis that he was not suffering a financial 

hardship caused by circumstances beyond his control. Upon review, we affirm.

 

1 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. The purpose of Act 91 is “to establish a program 

which will through emergency mortgage payments prevent widespread mortgage foreclosures ... 

which result from default caused by circumstances beyond a homeowner’s control.” Crawl v. 

Pa. Hous. Fin. Agency, 511 A.2d 924, 927 (Pa. Cmwlth. 1986).
2

I. Background

In June 2015, Homeowner applied to the Agency for a HEMAP loan. 

In his brief, Homeowner asserts he fell behind on his residential mortgage in 

September 2014 after incurring unplanned expenses for health reasons. At that 

time, Homeowner traveled to the Mayo Clinic and was ultimately diagnosed with 

Parkinson’s disease. Homeowner’s wife, Victoria O’Brien (Wife), helped finance 

his trip with a 401k loan.

However, Wife suffered a loss of income after her layoff from a 

second job. In addition, beginning in April 2014, Wife began living and working 

in Columbus, Ohio. As such, Wife now paid rent for an apartment and had a 

second set of household expenses. In addition, Wife took family medical leave to 

accompany Homeowner on his trip to the Mayo Clinic. This resulted in a smaller 

paycheck for that period.2

Homeowner’s financial problems worsened over the winter. 

Homeowner and Wife met with a credit counseling agency in June 2015. 

Homeowner, through the credit counselor, applied to the Agency for a HEMAP 

loan. In July 2015, the Agency denied Homeowner’s HEMAP application. 

Homeowner requested an appeal, and the Agency scheduled a hearing.

 

2 Homeowner also points out that he suffered a loss of approximately $298,000 in the 

early 2000s as a result of criminal activities by his stockbroker. Although the perpetrator was 

ordered to pay Homeowner restitution, he received, at most, $2,000. See Supplemental 

Reproduced Record at 50b. Nonetheless, Homeowner maintained his mortgage payments until 

September 2014. 
3

In August 2015, Homeowner participated in a telephonic hearing 

before Agency Hearing Examiner Resa Kepner (Hearing Examiner). In her 

September 2015 decision affirming the Agency’s decision denying Homeowner’s 

HEMAP application, Hearing Examiner made the following findings, calculations 

and conclusions.

Upon his mother’s death, Homeowner inherited one half of his 

childhood home in Pittsburgh. In July 1988, Homeowner purchased the remaining 

half of the property. At the time of Hearing Examiner’s decision, First Merit Bank 

held a mortgage on Homeowner’s property in the amount of $38,190.97. The 

mortgage originated at the time of Homeowner’s purchase.

According to a November 2014 Act 91 notice, mortgage payments 

were due from September 2014. An April 2015 bank statement reflected a total 

amount due of $11,265.24 through May 1, 2015. In addition, First Merit Bank 

completed a mortgage information sheet reflecting a total delinquency of 

$12,069.27 through June 30, 2015.

Homeowner’s monthly housing expense of $1,200, reported at the 

time of application and at the time of appeal, included the following items:

Subject Monthly Expenditure

At Application

Mortgage Payment $730

Real Estate Taxes Escrowed

Hazard Insurance Escrowed

Utilities $470

Total $1,200
4

Supplemental Reproduced Record (S.R.R.) at 4b.

In addition, Homeowner had a monthly installment debt consisting of 

an auto loan payment of $535. S.R.R. at 4b. Homeowner also had monthly living 

expenses of $631 at the time of his application and $756 at the time of appeal. Id.

This resulted in the following total monthly expenses at the times of application 

and appeal:

Subject Monthly Expenditure

At Application/Appeal

Total Monthly Housing Expenses $1200/$1200

Monthly Installment Debt $535/$535

Monthly Living Expenses $631/$756

TOTAL HOUSEHOLD EXPENSES $2,366/$2,491

Wife’s payroll deductions $0/$301

Wife’s expenses for Ohio residence $0/$1,225

TOTAL $2,366/$4,017

S.R.R. at 5b.

In determining Homeowner’s monthly income, Hearing Examiner

reviewed Homeowner’s W-2 statements and trust distributions. Hearing Examiner 

found that Homeowner’s monthly income from employment, self-employment and 

trust distributions totaled approximately $2,750 in 2013, $2,885 in 2014 and 

$2,881 in 2015 (to date of decision). S.R.R. at 5b. Hearing Examiner reasoned 

that this income alone should have been sufficient to cover the monthly household 

expenses of $2,491. Id. In fact, Homeowner’s income should have left a monthly 

surplus of $259 in 2013, $390 in 2014 and 2015, for a total surplus of $3,108 in 

2013, $4,680 in 2014 and $2,730 through July 2015. Id. However, Homeowner’s 
5

mortgage payments remained due from September 2014 through the time of 

appeal. Id.

Further, based on a review of Homeowner and Wife’s joint federal tax 

returns, W-2 statements and trust distributions, Hearing Examiner calculated 

Homeowner and Wife’s net monthly income from employment, self-employment 

and trust distributions as approximately $5,267 in 2013, $6,217 in 2014 and $5,475 

through July 2015. S.R.R. at 6b. Even considering their increased expenses 

beginning in 2014, when Wife began working and residing in Columbus, Ohio, 

Hearing Examiner calculated Homeowner and Wife’s monthly income as $6,217 in 

2014 and $5,475 in 2015. Id. Based on these calculations, Hearing Examiner 

determined Homeowner and Wife would have had a surplus of $2,200 per month 

or $26,400 in 2014, and a surplus of $1,458 per month through July 2015, for a 

total of $10,206 through July 2015. Id. However, Homeowner had a mortgage 

delinquency of 11 months, or approximately $12,799.66 through July 2015.

Therefore, Hearing Examiner observed, Homeowner and Wife should 

have had sufficient income to maintain the mortgage payment, meet their total 

monthly expenses and save enough funds to reduce the mortgage delinquency. 

S.R.R. at 6b. However, at the time of application, Homeowner had no money that 

could be applied toward the mortgage delinquency. Id. Hearing Examiner noted 

these facts reflected money mismanagement. Id. Consequently, Hearing 

Examiner determined the Agency properly denied Homeowner’s application for a 

mortgage assistance loan under Section 404-C(a)(4) of Act 91, 35 P.S. 
6

§1680.404c(a)(4), on the ground that Homeowner’s financial hardship could not be 

attributed to circumstances beyond his control. Homeowner petitions for review.3

II. Discussion

A. Argument

Homeowner contends Hearing Examiner erred in failing to find his 

financial hardship resulted from circumstances beyond his control where 

Homeowner and Wife encountered a series of events making it impossible for 

them to pay down their mortgage delinquency without emergency assistance. In 

particular, Homeowner asserts the Agency, in denying his loan, failed to take into 

account several factors.

First, although Hearing Examiner’s decision incudes Wife’s income in 

calculating the total household income, Homeowner argues Wife’s income should 

have been excluded because she lives and works outside the Pittsburgh area during 

the week. Second, Hearing Examiner’s decision failed to account for the cost of 

household healthcare.

 

3 Our review is limited to determining whether constitutional rights were violated, 

whether an error of law was committed, and whether necessary findings were supported by 

substantial evidence. R.M. v. Pa. Hous. Fin. Agency, 740 A.2d 302 (Pa. Cmwlth. 1999).

As fact-finder, the hearing examiner has complete authority over questions of witness 

credibility and evidentiary weight. A&J Builders, Inc. v. Workers’ Comp. Appeal Bd. (Verdi), 

78 A.3d 1233 (Pa. Cmwlth. 2013); see Coyne v. Pa. Hous. Fin. Agency, 826 A.2d 925 (Pa. 

Cmwlth. 2003). It is irrelevant whether there is evidence to support contrary findings; if 

substantial evidence supports the hearing examiner’s necessary findings, we will not disturb 

those findings on appeal. A&J Builders.
7

Third, although Wife received a taxable $10,000 bonus in 2014, this 

should not have been considered income because Wife’s employer required that 

this money be used for moving expenses. In fact, Wife used this money for 

approximately one year’s rent. However, Homeowner asserts Hearing Examiner’s 

decision does not reference the bonus money or indicate that it was not considered 

in calculating Homeowner’s actual income for 2014.

Additionally, in 2014, Wife lost her second job, which paid her about 

$9,000 to $10,000 per year. This job helped pay off Wife’s car loan. Homeowner 

further asserts that if Wife would have kept her second job, that money would have 

been applied to additional costs related to her job transfer or to home expenses.

Further, in early 2015, Homeowner learned that his mortgage lender 

required more than the amount originally in arrears to reactivate his account. The 

amount exceeded anything Homeowner could afford in a single payment. 

Homeowner contends the Agency overlooked this fact.

In sum, Homeowner argues, he and his wife suffered several setbacks 

since 2014, including health and job issues. These setbacks, which occurred 

closely together, were beyond Homeowner’s control. Therefore, Homeowner 

requests that we reverse the Agency’s decision denying him a HEMAP loan.

B. Analysis

In order to qualify for a HEMAP loan, a homeowner must show he 

meets the eligibility criteria in Act 91. Coyne v. Pa. Hous. Fin. Agency, 826 A.2d 
8

925 (Pa. Cmwlth. 2003); Crawl v. Pa. Hous. Fin. Agency, 511 A.2d 924 (Pa. 

Cmwlth. 1986). Further, the Agency’s interpretation of Act 91 is entitled to great 

weight and may only be overturned if such construction is clearly erroneous. 

Horton v. Pa. Hous. Fin. Agency, 511 A.2d 917 (Pa. Cmwlth. 1986).

In the present case, Hearing Examiner determined Homeowner failed 

to establish that his financial hardship resulted from circumstances beyond his 

control. Sections 404-C(a)(4) and (10) of Act 91 state:

(a) No assistance may be made with respect to a 

mortgage or mortgagor under this article unless ....

* * * *

(4) The mortgagor ... 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.

* * * *

(10) For purposes of this section, in order to determine 

whether the financial hardship is due to circumstances 

beyond the mortgagor’s control, the agency may consider 

information regarding the mortgagor’s employment 

record, credit history and current income.

35 P.S. §§1680.404c(a)(4) & (10) (emphasis added).

In addition, the Agency’s regulations governing financial hardship 

due to circumstances beyond the homeowner’s control, set forth in the 

Pennsylvania Code, pertinently provide:
9

(a) General. The Agency will consider all relevant 

factors when evaluating whether the homeowner is 

suffering financial hardship and whether the financial 

hardship is due to circumstances beyond the 

homeowner’s control, including the following:

(1) The homeowner’s past and present household income 

and reasons for reductions in household income. 

(2) Assets which were or are available and could have 

been or can be liquidated to correct the mortgage 

delinquency. The Agency will not consider assets in a 

pension, profitsharing, annuity or similar retirement plan 

or contract as available for liquidation to the extent that 

these funds are reasonably necessary for the support of 

the homeowner, or dependents or the surviving spouse of 

the homeowner.

* * * *

(4) The homeowner’s employment history—including 

unemployment, underemployment and the reasons 

therefore—and eligibility for other types of financial 

assistance. 

(b) Examples. Examples of circumstances beyond 

the mortgagor’s control which result in financial hardship 

to the mortgagor include the following: 

* * * *

(2) Loss, reduction or delay in receipt of Federal, State 

or other Government benefits (for example, Social 

Security, Supplemental Security Income, Public 

Assistance, Government Pensions), or of private benefit 

payments—for example, pensions, annuities, retirement 

plans. 

(3) Loss, reduction or delay in receipt of income because 

of the death or disability of a person who contributed to 

the household income. 

* * * *
10

(5) Expenses actually incurred related to uninsured 

damage or costly repairs to the mortgaged premises 

affecting its habitability.

(6) Expenses related to death or illness in the 

homeowner’s household or of family members living 

outside the household which reduce the amount of 

household income.

(7) Loss of income or substantial increase in total 

housing expenses because of a divorce, abandonment, 

separation from a spouse or failure to support.

* * * *

(c) Disallowance. The following circumstances 

will not be considered by the Agency to be beyond the 

mortgagor’s control: 

* * * *

(3) When the homeowner had sufficient income to pay 

his mortgage, but failed to do so. In this regard, if the 

homeowner’s total housing expense is less than or equal 

to 40% of net effective income, and no reasonable cause 

for financial hardship is demonstrated by the homeowner, 

nonpayment of the mortgage debt will not be considered 

to be a circumstance beyond the homeowner’s control. 

(4) When the homeowner’s financial hardship was a 

result of money mismanagement or an over extension of 

credit to the homeowner. In this regard, the Agency will 

consider the following in determining whether the 

homeowner used prudent financial management: 

(i) The homeowner’s continued payment of normal and 

necessary living expenses after the financial hardship 

occurred will not be considered evidence of poor 

financial management. The homeowner’s continuing to 

make reasonable payments on debts reasonably incurred 

prior to the financial hardship also will not be considered 

evidence of poor financial management. 
11

(ii) Debts incurred or expenditures made by the 

homeowner for non-necessities, during the financial 

hardship, which exceeded the homeowner’s ability to 

pay, will be considered evidence of poor financial 

management. 

* * * *

(e) Cause of financial hardship. In determining 

the cause of the financial hardship, the Agency will 

determine whether the cause is one event—such as the 

loss of a job, separation or divorce, sickness or injury—

or whether a series of factors beyond the homeowner’s 

control, in combination, caused the financial hardship.

12 Pa. Code §31.205.

In the instant case, Hearing Examiner determined Homeowner was 

not suffering from financial hardship beyond his control because his monthly 

income from trust distributions, employment and self-employment exceeded his 

total expenses, including total housing expenses by $4,680 in 2014 and by $2,730 

through July 2015. S.R.R. at 4b-6b. 

Further, Homeowner and Wife’s combined total income, exceeded 

their combined expenses, including Wife’s separate living expenses, by $2,200 per 

month or $26,400 annually in 2014, and by $1,458 per month or $10,206 through 

July 2015. S.R.R. at 5b. However, at the time of Homeowner’s July 2015 appeal, 

he had $0 that he could apply toward his mortgage delinquency. Id. Therefore, 

Hearing Examiner determined Homeowner’s financial hardship resulted from 

money mismanagement rather than from circumstances beyond his control. Id.
12

On appeal here, Homeowner first argues Hearing Examiner should not 

have included Wife’s income in calculating his total household income because she 

works and maintains a separate residence in Columbus, Ohio. Homeowner further 

maintains that Hearing Examiner’s decision failed to account for the costs of 

household healthcare.

In her decision, Hearing Examiner noted Homeowner and Wife’s 

federal tax return, processed as married filing jointly, reflected a total annual 

income of $74,517 for an average net monthly income of $5,657.4 S.R.R. at 2b. 

Based on their W-2 Forms and trust distributions, Hearing Examiner calculated 

Homeowner and Wife’s actual combined net monthly income during 2014 as 

$6,217, and $5,475 through July 2015. S.R.R. at 6b. Homeowner and Wife’s 

combined net monthly income exceeded their total monthly expenses of 

approximately $4,020 by more than $2,000 per month at the time of Homeowner’s 

June 2014 application and by more than $1,400 per month at the time of 

Homeowner’s July 2015 appeal. Because Homeowner and Wife had sufficient 

income to maintain Homeowner’s mortgage and meet Wife’s second household 

expenses, we discern no error or abuse of discretion in Hearing Examiner’s 

inclusion of Wife’s income in calculating Homeowner and Wife’s total monthly 

expenses.

More to the point, even excluding Wife’s income and expenses, 

Hearing Examiner determined Homeowner’s average net monthly income, $2,939 

 

4

In its brief, the Agency explained that these figures are an estimate based on a 25% tax 

deduction. Respondent’s Br. at 7, n.3.
13

at the time of application, should have been sufficient to cover his total monthly 

expenses of $2,366, including the $730 per month mortgage payment. S.R.R. at 

5b. Also, review of Homeowner’s W-2 Forms alone (not reflecting trust 

distributions and self-employment) reflected an average net monthly income of 

$2,885 in 2014 and $2,881 to date in 2015, which should have been sufficient to 

cover Homeowner’s total expenses of $2,366 at time of application and $2,491 at 

time of appeal. See S.R.R. at 3b-5b. Therefore, Homeowner should have been 

able to maintain his mortgage payments based on his income alone. 

Sensitive to Homeowner’s health-related arguments, we examine 

evidence regarding his healthcare costs. Homeowner testified he was covered 

under his wife’s employer’s health insurance plan. See Agency Hr’g, 8/11/15, 

Notes of Testimony (N.T.) at 9; S.R.R. at 33b. Homeowner also testified that other 

than the trip to the Mayo Clinic, which his wife paid for with a 401k loan in the 

amount of $2,000, he had no medical expenses other than co-pays. N.T. at 9-10, 

S.R.R. at 33b-34b. Further, Homeowner did not testify that Wife had any other 

medical expenses. See N.T. at 9; S.R.R. at 34b. Therefore, we reject 

Homeowner’s contention that Hearing Examiner’s decision failed to account for 

the costs of household healthcare.

Homeowner next contends Wife received a taxable $10,000 bonus in 

2014, which she used as approximately one year’s rent for her Columbus, Ohio 

apartment. Homeowner asserts Hearing Examiner’s decision does not reference 

the bonus money or indicate whether Hearing Examiner considered it in 
14

calculating his 2014 income. Homeowner further asserts Wife lost her second job, 

which paid her about $9,000 to $10,000 per year.

In response, the Agency indicated in its brief that Wife’s $10,000 

lump sum payment “should have offset any costs associated with her relocation 

and covered some of the rent payments.” Respondent’s Br. at 16. Hearing 

Examiner determined Homeowner had no expenses for Wife’s apartment at the 

time of his June 2015 application. S.R.R. at 5b. This is consistent with 

Homeowner’s testimony that Wife used the $10,000 bonus for approximately one 

year’s rent. As discussed above, Homeowner had sufficient monthly income at 

application ($2,885) to meet his total monthly expenses of $2,366. Id.

Also, at the time of Homeowner’s August 2015 appeal, Homeowner 

and Wife had sufficient net monthly income ($5,475) to cover their total expenses 

of $4,017, which included expenses for Wife’s Ohio residence. Id. Moreover,

Hearing Examiner’s decision included only Wife’s income from Verizon, her 

primary employer. Nothing in the record indicates Hearing Examiner included any 

income derived from Wife’s second job. See Respondent’s Br. at 16. 

Accordingly, we discern no error or abuse of discretion in Hearing Examiner’s 

calculations or ultimate decision related to Wife’s $10,000 lump sum payment or 

income from her second job.

Finally, Homeowner contends his mortgage lender required the full 

amount originally in arrears to reactivate his account. Homeowner asserts the 
15

amount required exceeded what he could afford in a single payment and that 

Hearing Examiner overlooked this fact.

We disagree. Hearing Examiner’s calculations are borne out by the 

record and support her determination that Homeowner’s income alone should have 

been sufficient to maintain his mortgage at the time of his June 2015 application. 

Moreover, Hearing Examiner’s calculations indicate that Homeowner and Wife’s 

combined net monthly income should have been sufficient to cover their total 

monthly expenses at the time of Homeowner’s application with a surplus of at least 

$2,000 per month. See S.R.R. at 3b-6b. Even with Wife’s additional relocation 

expenses, Homeowner and Wife’s combined income should have been sufficient to 

meet their total monthly expenses at the time of Homeowner’s July 2015 appeal 

with a surplus of at least $1,400 per month. Id. Nevertheless, at the time of 

Homeowner’s application, he had no money saved that could be applied to the 

mortgage, which after 11 months reached a total of $12,799.66 through July 2015. 

Id. 

Given these circumstances, the Hearing Examiner did not commit 

error in concluding that Homeowner’s failure to pay anything toward his mortgage 

for an extended time, coupled with his failure to save any money in lieu of making 

mortgage payments, was the cause of his predicament. The bank’s interest in 

bringing the mortgage current was not the operative problem.

The provisions of Act 91, and the Agency regulations, quoted above, 

dictate our conclusion: we find no error or abuse of discretion in the Hearing 
16

Examiner’s determination that Homeowner failed to establish that his mortgage 

delinquency arose from a financial hardship caused by circumstances beyond his 

control. Accordingly, the Agency properly denied Homeowner’s HEMAP

application under Section 404-C(a)(4) of Act 91, 35 P.S. §1680.404c(a)(4).

For these reasons, we affirm the Agency’s final order. 

 

 

ROBERT SIMPSON, Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Eric M. O’Brien, :

Petitioner :

:

v. : No. 2089 C.D. 2015

:

Pennsylvania Housing Finance Agency, :

Respondent :

O R D E R

AND NOW, this 18th day of April, 2016, for the reasons stated in the 

foregoing opinion, the order of the Pennsylvania Housing Finance Agency is 

AFFIRMED.

 

ROBERT SIMPSON, Judge