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Case Law - save on Lexis / WestLaw. IN THE COMMONWEALTH COURT OF PENNSYLVANIA Josephine Knoll, : Petitioner : : v. : No. 1430 C.D. 2004 : SUBMITTED: January 28, 2005 Pennsylvania Housing Finance Agency, : Respondent : BEFORE: HONORABLE JAMES GARDNER COLINS, President Judge HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE ROBERT SIMPSON, Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE LEADBETTER FILED: April 18, 2005 Josephine Knoll appeals, pro se, from the denial of her application for mortgage assistance under the Homeowner's Emergency Mortgage Assistance Program (HEMAP), established by the Housing Finance Agency Law (HFA Law)1. Upon review, we affirm. Knoll purchased property located at 2305 Canby Street, Harrisburg, Pennsylvania in 1983. The original mortgage taken out on the property was in the amount of $36,000. Knoll submitted an application for a HEMAP loan on 1 Act of December 3, 1959, P.L. 1688, as amended, 35 P.S. § § 1680.101-1680.603a. February 2, 1992, which was subsequently approved by the Pennsylvania Housing Finance Agency (Agency). In July 1996, Knoll refinanced the original mortgage by obtaining a mortgage loan from Fairbanks Capital Corporation (Fairbanks) in the amount of $43,225.2 With this money, Knoll paid off the first mortgage, along with the HEMAP loan provided by the Agency. Knoll fell behind on her mortgage payments and subsequently brought the mortgage current in April 1999 with a new HEMAP loan. On December 3, 2003, Fairbanks notified Knoll that the mortgage was in default because monthly payments had not been made on the account. On January 2, 2004, Knoll met with the Community Action Commission (CAC), a consumer credit counseling agency, to prepare an application for a loan from HEMAP. CAC forwarded the application to the Agency. The Agency denied Knolls' application on the following pertinent grounds: 1. Mortgage Assistance loan period is limited to twenty- four (24) months. Applicant previously used 7 months of mortgage assistance. Mortgage is currently delinquent from 5/1/02 through 3/1/04 or 23 months of payment. 2. No reasonable prospect of mortgagor resuming full mortgage payments within twenty-four (24) months and paying mortgage(s) by maturity based on: Mortgagor's income has been insufficient to maintain mortgage for the past two (2) years. Total monthly expenses: $1,089. 2000 net monthly income: $482, 2001: $465, 2002: $47.00, currently: (room and board) $400. . . . . 2 The mortgage with Fairbanks provided for a 30-year term and a $497 monthly payment. 2 PHFA Letter of Denial, (dated, March 4, 2004). Knoll appealed. In her appeal, Knoll challenged the Agency's findings and argued that she would soon be in a position to make her HEMAP loan current. A hearing before an Agency hearing examiner ensued. At the hearing on April 22, 2004, Donald Goss, a loan officer with the Agency, testified that Knoll had previously used seven months of mortgage assistance and that her current mortgage had been delinquent for twenty-three months, specifically, from May 1, 2002 through March 1, 2004. Notes of Testimony (N.T.) at 2. Knoll's income tax returns, introduced during the hearing, indicated that she earned $7,714 in 2000; $3,149 in 2001; and $752 in 2002. N.T., Exhibit 6. According to Knoll, however, her financial circumstances were improving. She explained that she had been selling Avon products periodically for approximately five years, and that, although she temporarily stopped her sales job in the fall of 2003 due to an inoperative vehicle, she had resumed sales in March 2004. Knoll testified that she currently had a monthly net income of $1,110, consisting of $400 in rental payments from her son, and $700 in Avon sales.3 Knoll also testified regarding her monthly expenses, which the hearing examiner determined amounted to $964. Knoll claimed she had saved $3,000 (the equivalent of six mortgage payments) to apply toward the delinquency. At the time of the hearing, however, Knoll was unable to provide documentation of the $3,000, and when asked to do so by the hearing examiner, she explained that she needed 15 days to get the documentation because the money was "tied up." N.T. at 19. According to Knoll, she could resume full mortgage payments in nine months. 3 Knoll was unable to verify her Avon earnings. She explained that she had not reported the Avon income on her federal tax returns because Avon never gave her a 1099 form. 3 Based upon the testimony and evidence presented, the hearing examiner concluded that: The foregoing findings of fact exhibit that [Knoll] received seven months of mortgage loan disbursements under a prior application and currently owes from May 2002 through April 2004 or for 24 months. [Knoll] has the equivalent of six payments to apply toward the delinquency, reflecting a request of 18 months of assistance through April 2004. [Knoll] plans to resume full mortgage payments in nine months. [Knoll's] request for a loan should be denied on the following grounds: Mortgage assistance loan period is limited to twenty-four (24) months. Moreover, the total monthly expenses exceed the documented average monthly net effective income on record per year since 2000. [Knoll] therefore has been generating insufficient income to support this level of mortgage expense and total monthly expenses for at least the past two years. . . . There is no reasonable prospect of [Knoll] resuming full mortgage payments . . . and paying the mortgage by maturity. Decision of Hearing Examiner at 4, (dated, May 10, 2004). Accordingly, the hearing examiner affirmed the Agency's decision denying Knoll's loan application. Knoll now appeals to this court. 4 On appeal, Knoll makes two arguments. First, Knoll argues that the Agency, as affirmed by the hearing examiner, erred in not granting her loan application. Specifically, Knoll contends: "[c]laimant has six months of payments 4 This court's scope of review is limited to determining whether an error of law was committed or whether necessary findings of fact are not supported 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 (Pa. Cmwlth. 1986). 4 which would satisfy the twenty-four month loan period allowed. I had used seven months, was twenty-three months behind and had six months payments [sic]. I also had the $1,089 monthly expenses needed in income." Brief of Petitioner at 6 (citations omitted). It is well-established that to qualify for a HEMAP loan, an applicant must meet the eligibility criteria set forth in Section 404c, 35 P.S. § 1680.404c. Section 404c provides in pertinent part: (a) No assistance may be made with respect to a mortgage or mortgagor under this article unless all of the following are established: . . . . (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 . . . . 35 P.S. § 1680.404c (a)(5) (emphasis added). The administrative guidelines for the HEMAP program, set forth at 12 Pa. Code § 31.206(b), provide that an applicant has a "reasonable prospect" of resuming mortgage payments if he or she can demonstrate, inter alia, a "favorable work and credit history," and "the ability and history of paying the mortgage when employed." The hearing examiner concluded that Knoll did not meet the statutory eligibility criterion, and our review of the record reveals that this determination is supported by substantial evidence. Knoll's unsubstantiated assurances that her income would soon improve are simply inadequate to overcome her history of chronic and ongoing inability to meet her payments. See Koch v. Pennsylvania Housing Finance Agency, 505 A.2d 649, 651 (Pa. Cmwlth. 1986) (concluding that "it was not an act of capricious or arbitrary 5 disregard of evidence on the part of the hearing examiner to have discounted the Petitioner's assurances that he would do in the future what he had failed to do in the past."). Accordingly, we are bound by the hearing examiner's determination that Knoll failed to demonstrate the "reasonable prospect" required by Section 404c. Second, Knoll argues that the Agency discriminated against her because she suffers from diabetes. According to Knoll, over the years her diabetic condition prevented her from fully comprehending the terms of the mortgage agreements.5 She asserts that "PHFA purposely confused me to discriminate against me." Brief of Petitioner at 7. We note, however, that Knoll did not raise this claim before the hearing examiner nor was it contained in her petition for review to this court. As such, Knoll's argument that she was discriminated against because of her medical condition is waived.6 See Sharp Equipment Co. v. Unemployment Comp. Bd. of Review, 808 A.2d 1019, 1025 (Pa. Cmwlth. 2002) (where party fails to raise issue prior to appearing before Commonwealth Court, the issue is waived). 5 Knoll asserts: when I was asked when I could resume full mortgage payments I felt I was not fully understanding the question. Confusion is a side effect of diabetes under a stressful situation. I was not fully understanding what was being asked and that I was lead to believe I had 24 months to resume my full payments. I feel they asked a leading question and due to my disability I needed more understanding and clarification of the question due to my disability. Brief of Petitioner at 6-7. 6 In her reply brief to our court, Knoll also attempts to argue, for the first time, that the Agency discriminated against her due to both her race and gender. Id. However, as discussed above, these arguments were waived since Knoll failed to properly preserve them for appeal and, therefore, we will not consider them. 6 Accordingly, the order of the Agency is affirmed. ________________________________________ BONNIE BRIGANCE LEADBETTER, Judge 7 IN THE COMMONWEALTH COURT OF PENNSYLVANIA Josephine Knoll, : Petitioner : : v. : No. 1430 C.D. 2004 : Pennsylvania Housing Finance Agency, : Respondent : O R D E R AND NOW, this 18th day of April, 2005, the order of the Pennsylvania Housing Finance Agency in the above captioned matter is hereby AFFIRMED. ________________________________________ BONNIE BRIGANCE LEADBETTER, Judge
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