IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Brien L. Readinger, :

: Petitioner :

:

v. : No. 282 C.D. 2017

: Submitted: October 13, 2017 Pennsylvania Housing Finance : Agency, :

: Respondent :

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge

HONORABLE MICHAEL H. WOJCIK, Judge HONORABLE J. W ESLEY OLER , Jr., Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY JUDGE WOJCIK FILED: January 29, 2018

Brien L

. Readinger (Petitioner) petitions pro se for review of the

January 14, 2017 adjudication of a Hearing Examiner of the Pennsylvani a Housing

Finance Agency (PHFA ) denying his application for emergency mortgage assistance

under the statute known as the Homeowner’s Emergency Mortgage Assistance Lo an
Program (HEMAP) Act (Act 91). 1 We affirm.

1 Act of Decembe r 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 purpo se of Act 91 is “to establish a program which will through emergency mortgage payments prevent widespread mortgage foreclosures .

. . whi ch result from default caused by circumstances beyond a homeowner's control .” Crawl v. Pennsylvania Housing Finance Agency

, 511 A.2d 924, 927 (Pa. Cmwlth. 1986) (emphasis in original).2 In May 2009, Petitioner secured a primary mortgage from Santander

Bank, N.A. (Santander) in the amount of $119,200 to purchase the property located

at 1054 Shoemakersville Road, Shoemakersville, Pennsylvania (Property). The
monthly mortgage payments are $896

. Thereafter, Petitioner secured a second

position mortgage from Santander as a secu red line of credit in the amount of

$10,000 . The monthly mortgage payments are $44. Petitioner contacted Santander

in 2010 or 2011 seeking to refinance his primary mortgage , but his application was

denied

. Supplemental Reproduced Record (S.R.R.) at 2b.

Petitioner received an Act 91 Notice dated August 2, 2016, indicating

that Santander intended to foreclose on the Property based on a default in the

mortgage payments beginning June 1, 2016. S.R.R. at 6b

- 8b. The PHFA received

Petitioner’s HEMAP applicat ion on September 27, 2016. S.R.R. at 2b. At the time
of his application, Petitioner’s monthly expenses totaled $2,399. S.R.R. at 3b.

Prior to the foreclosure notice , Petitioner was employed at Carpenter, a

compa ny for which he began work in July 2006. In December 2013, Petitioner was

terminated though the record does not indicate a reason for the termination.

Petitioner obtained a new position with C.R. England, a tractor trailer company, in

September 2014, where he worked for approximately seven mont hs before

resigning. Beginning in March 2015, Petitioner worked for the Reading Area Water

Authority (Water Authority) for approximately one year until he was terminated in

March 2016. When the PHFA reviewed Petitioner’s HEMAP application, Petitioner

was unemployed. S.R.R. at 2b.

The PHFA initially denied Petitioner’s HEMAP application because it

determined that: (1) Petitioner had no reasonable prospect of resuming full mortgage

payments within 24 months from the date of mortgage delinquency and paying the3

mortgage by maturity because his income was insufficient, 2 and (2) Petitioner’s

financial hardship was due to overextension, not circumstances beyond his control. 3

Petitioner requested and was granted a hearing to contest the PHFA’s initial denial

of his HEMAP application.

A Hearing Examiner conducted a telephonic hearing on December 8,

201 6

. Petitioner testified that he attempted to refinance his mortgages in 2010 or

2011 in order to pay off his installment debt and lower his interest rate. S.R.R. at
44b. He averred that Santander denied his application without explanation. Id.

Petitioner testified that he terminated his employment at C.R. England

because he was not earning sufficient income and that he had not received proper

training to adequ ately perform his job duties. S.R.R. at 33 b . Petitioner further

testified regarding his termination from the Water Authority, that he informed his

2 Section 404

- C (a)(5) of Act 91 provides that no assistance may be made with respect to a mortgage or mortgagor unless

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 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.

35 P.S. § 1680.404c(a)(5) (emphasis added). The initial decision appears to co nflate this requi rement with that of Section 404

- (a)(8), which provides that no assistance may be provided
unless the PHFA determines “that the mortgagor has insufficient household income or net worth to correct the delinquency or delinquencies within a re asonable period of time and make full
mortgage pay ments,” and that of Section 404

- C (a)(12), which requires that no assistance may be provided if the mortgagor is more than 24 consecutive or non

- consecutive months in arrears, no
matter the reason therefore. 35 P.S. §§ 1680.404c(a)(8),(12).

3 Section 404

- C (a)(4) of Act 91 provides that no assistance may be provided unless the mortgagor is suffering financial hardship as the result of circumstances beyond his control. 35
P.S. § 1680.404c(a)(4).4

supervisor that he w as leaving early due to illness but was suspended pending an

investigation . S.R.R. at 36b. According to his Letter of Circum stance submitted

with his HEMAP application, the Water Authority asserted that Petitioner quit his

position and violated a work rule, which resulted in his termination. S.R.R. at 56b

.
Petitioner testified that he di d not violate a work rule and that he was contesting his

termination from the Water Authority as unlawful. S.R.R. at 35b

- 36b. Petitioner

stated that he applied for unemployment compensation benefits following his

termination, but the Unemployment Compens ation Board of Review (Board)

determined that Petitioner was ineligible because his discharge was the result of

willful misconduct. 4 S.R.R. at 37b. He tes t ified that he appealed his denial to this

Court and expected that he would receive approximately $14,000 to $15,000

, should

he prevail. 5 S.R.R. at 37b, 46b.

Since his separation from employment at the Water Authority,

Petitioner has been searc hing for a new position, but at the time of the hearing h ad

been unable to obtain new employment. S.R.R. at 37b. Petitioner also testified that

his monthly expenses had decreased since the date of his HEMAP application

.
S.R.R. at 39b

- 43b.

By decision entered January 14, 2017, the Hearing E xaminer affirmed

th e initial decision of the PHFA and denied the mortgage assistance loan. She

determined that Petitioner’s employment had not bee n steady since December 2013.

She also determined that the outcome of Petitioner’s then

- pending appeal of his

4 Section 402( e) of the Unemplo yment Compensation Law provides that an employee shall be ineligible for compensation for any week in which his unemployment is due to his discharge
from work for willful misconduct connected with his work. Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended , 43 P.S. § 802(e).

5 On June 5, 2017, we affirmed the order of the Board. Readinger v. Unemployment Compensation Board of Review , (Pa. Cmwlth., No. 1289 C.D. 2016, filed June 5, 201 7).5

unemployment comp ensation benefits or Petitioner’s ability to secure any future

employment within the statutory period to resume full mortgage payments was
speculative.

On appeal, 6 Petitioner argues that the Hearing Examiner erred in

determining that he did not have a rea sonable prospect of resuming full mortgage

payments within the statutory period and paying the mortgage by maturity

. An

applicant for a HEMAP loan has the burden of establishing the facts necessary to

qualify under Act 91. Koch v. Pennsylvania Housing Fi nance Agency , 505 A.2d

649, 650 (Pa. Cmwlth. 1986). As a matter of policy, the PHFA will generally

consider a number of factors, including an applicant’s prior work history and

financial prospects

, in determining whether an applicant has a reasonable prospect

of resuming full mortgage payments within the statutory period and paying the

mortgage by maturity. 7 The PHFA will generally determine that an applicant

6 This Court ’ s scope of review is limited to determining whether constitutional rights were violated, an error of law was committed, or necessary findings of fact are not sup ported by
substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa. C.S. § 704; Johnson v. Pennsylvania Housing Finance Agency , 512 A.2d 1319, 1321 (Pa. Cmwlth. 1986).

7 The PHFA’s regulations provide, in pertinent part:

(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 affect6

demonstrates a reasonable prospect of r esuming payments, despite unemployment,

if he is suffering financial hardship through no fault of his own and is able to

demonstrate a favorable work history. 12 Pa. Code § 31.206(b)(1). 8

However, n either the Act nor the PHFA ’s regulations allow for the

c onsideration of speculative income and the PHFA is bound to evaluate an

applicant’s eligibility based on his actual income history. Cullins v. Pennsylvania

Housing Finance Agency , 623 A.2d 951, 954 (Pa. Cmwlth. 1993). Consequently, a

hearing examiner doe s not abuse her discretion or commit an error of law in denying

an application for mortgage assistance when the applicant’s evidence of f uture
income is speculative or legally insufficient to demonstrate a reasonable prospect of

resuming mortgage payments and paying the mortgage by maturity. See R.M. v.

Pennsylvania Housing Finance Agency, 740 A.2d 302, 308 (Pa. Cmwlth. 1999)

( holding that despite applicant ’s evidence of significant earning potential, he failed

the homeowner ’ s future employment opportunities. (2) Potential for future changes in the
homeowner ’ s financi al prospects through re

employment, schooling, training or debt reduction, or other income changes sufficient
to enable the homeowner to resume full
mortgage payments.

12 Pa. Code §31.206(a)(1),(2). Our Court has held that this provision is a non

- binding statement of policy rather than a regulation with the force and effect of law. R.M. v. Pennsylvania Housing Finance Agency

, 740 A.2d 302, 308 (Pa. Cmwlth. 1999)

.

8 PHFA will generally determine that an applicant has demonstrated a reasonable prospect
of resuming payments and paying the mortgage by maturity despite unemployment by presenting evidence of: (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 t hat preve nts reemployment; and (4) that he is actively seeking work as evidenced by a written statement to that effect. 12 Pa. Code §31.206 (b)

.7

to present evidence as to when he could expec t 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. ” ) ; Mull v. Pennsylvania Housing

Finance Agency , 529 A.2d 1185, 1188 (Pa. Cmwlth. 1987) (holding 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 insufficien t to meet her monthly expenses)

.

Petitioner did not introduce any evidence beyond his own bare

assertions that there was a reasonable prospect that he could resume payments.

Instead, t he record demo nstrates that Petitioner has remained unemployed since

March 2016 despite his efforts to regain his former employment or secure new

employment. The record also indicates an unfavorable work history where

Petitioner was terminated from two of the three pos itions he held in the previous

four years and that he voluntarily quit the third position. Therefore, the Hearing

Examiner did not err in her determination that Petitioner had no reasonable prospect

of resuming full mortgage payments within 24 months and payment of the mortgage

in full by maturity.

Accordingly, the PHFA’s order is affirmed.

MICHAEL H. WOJCIK, JudgeIN THE COMMONWEALTH COURT OF PENNSYLVANIA

Brien L. Readinger, :

: Petitioner :

:

v. : No. 282 C.D. 2017

: Pennsylvania Housing Finance : Agency, :

: Respondent :

O R D E R

AND NOW, this 29 th day of January , 201 8

, the order of the

Pennsylvania Housing Financ e Agency, dated January 14, 2017 , is AFFIRMED.

__________________________________ MICHAEL H. WOJCIK, Judge