           IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Jeffrey L. Goss,                             :
                            Petitioner       :
                                             :
              v.                             :    No. 1592 C.D. 2018
                                             :    Submitted: August 16, 2019
Pennsylvania Housing Finance                 :
Agency,                                      :
                       Respondent            :

BEFORE:       HONORABLE MARY HANNAH LEAVITT, President Judge
              HONORABLE ROBERT SIMPSON, Judge1
              HONORABLE MICHAEL H. WOJCIK, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY PRESIDENT JUDGE LEAVITT                                       FILED: January 6, 2020

              Jeffrey L. Goss, pro se, petitions for review of an adjudication of the
Pennsylvania Housing Finance Agency (PHFA) that denied his application for
emergency mortgage assistance under the Homeowner’s Emergency Mortgage
Assistance Program (HEMAP) that PHFA administers.2 On appeal, Goss argues
that PHFA erred in determining that he had no reasonable prospect of being able to
resume making his mortgage payments within 24 months. For the reasons to follow,
we affirm.
              Goss owns a home at 373 Tow Hill Road in Port Matilda, Pennsylvania.
In 2006, JPMorgan Chase Bank, N.A. (Chase) extended Goss a $100,000 line of

1
  This matter was assigned to this panel before September 1, 2019, when Judge Simpson assumed
the status of senior judge.
2
   Act of December 3, 1959, P.L. 1688, No. 621, as amended, added by the Act of December 23,
1983, P.L. 385, No. 91, 35 P.S. §§1680.401c-1680.412c (Act 91). Act 91 established “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.
Pennsylvania Housing Finance Agency, 511 A.2d 924, 927 (Pa. Cmwlth. 1986).
credit secured by his residence, with a monthly mortgage payment of $904. In July
2017, Chase sent Goss a default notice because he had stopped making payments in
May. That notice included information about HEMAP loan assistance. In August
2017, Goss met with a consumer credit counseling agency to prepare a HEMAP loan
application, which he submitted to PHFA in September 2017.
            In October 2017, PHFA denied Goss’s HEMAP application for the
following reasons:

            1. No reasonable prospect of applicant resuming full mortgage
            payments within twenty-four (24) months from the date of the
            mortgage delinquency and paying the mortgage(s) by maturity
            based on: Applicant has been unemployed or has not worked for
            previous two (2) years.
            2. No reasonable prospect of applicant resuming full mortgage
            payments within twenty-four (24) months from the date of the
            mortgage delinquency and paying the mortgage(s) by maturity
            based on: Applicant’s income is insufficient to maintain
            mortgage.
            3. No reasonable prospect of applicant resuming full mortgage
            payments within twenty-four (24) months from the date of the
            mortgage delinquency and paying the mortgage(s) by maturity
            based on: Applicant is financially overextended based upon
            income history.

HEMAP Letter, 10/06/2017, at 1; Supplemental Reproduced Record at 17b (S.R.R.
__). Goss appealed, and on July 31, 2018, PHFA appointed a hearing examiner to
conduct an evidentiary hearing.
            At the hearing, Goss testified that his default was “caused by
circumstances beyond [his] control[.]” Notes of Testimony, 7/31/2018, at 7 (N.T.
__); S.R.R. 38b. He explained that in November of 2015, he suffered sepsis that
required a four-month hospitalization. During this hospitalization, Goss used his

                                       2
retirement savings to make his monthly mortgage payments. After his savings were
exhausted, Goss was unable to continue the monthly mortgage payment of $904.
              Goss explained his monthly expenses of $1,266. His monthly mortgage
payment was $904; his monthly homeowner’s insurance premium was $110; and his
monthly car insurance premium was $32. He spent approximately $200 a month on
electricity and groceries. His cell phone bill was $20 a month. In February 2018,
his homeowner’s insurance premium increased, raising his fixed monthly expenses
to $1,311.08.
              Goss owns and operates Rocket-7 Design, Inc., an architectural design
and construction company. On his HEMAP application, Goss reported a gross/net
monthly income from Rocket-7 Design of $0. S.R.R. 63b. Further, Goss testified
that he has not filed a federal tax return since 2013 because he had no reportable
income. Over the past 12 months, Goss has raised approximately $5,000 by “selling
some personal belongings.” N.T. 12; S.R.R. 43b. In July 2018, Goss applied for
social security supplemental income (SSI) benefits3 and at the time of the hearing
was awaiting a final eligibility determination.
              Goss testified that he has an associate degree in architectural
technology and a good employment history. Prior to establishing Rocket-7 Design
in 1994, he worked as a network administrator, account executive, and mechanical
non-standard designer. In March 2018, he resumed working part-time at Rocket-7
Design. He testified that he has been “involved in an active search for employment,
which also includes … [his] active client list.” N.T. 10; S.R.R. 41b. At the time he
submitted his loan application, Goss had applied for more than 18 jobs.


3
 SSI “provide[s] disabled persons with only basic necessities needed to maintain their health and
support[.]” Ricco v. Novitski, 874 A.2d 75, 83 (Pa. Super. 2005).
                                               3
               Goss testified that PHFA and the consumer credit counselor recorded
inaccurate information in his loan application materials. He asserted that PHFA had
not considered all relevant information when it denied his application, including that
he only needed a loan of $2,773.70, and he has made almost $73,000 in mortgage
payments to Chase.
               On September 29, 2018, the hearing examiner denied Goss’s appeal.
The hearing examiner explained that Goss was financially overextended and was
unlikely to be able to resume making full mortgage payments, even with mortgage
assistance from PHFA.
               On appeal,4 Goss raises three issues. He argues that PHFA erred in
denying his HEMAP loan application; PHFA failed to consider all factors relevant
to whether he had a reasonable prospect of resuming full mortgage payments within
24 months; and PHFA and the consumer credit counseling agency did not provide
him with the documents he needed for his mortgage assistance application. In effect,
Goss argues that PHFA erred in determining that he has no reasonable prospect of
resuming full mortgage payments within the required time period. Goss contends
that his educational background, work history, and receipt of monthly SSI benefits
demonstrate a likelihood that he will be able to resume making full mortgage
payments.
               We begin with a review of Act 91. Under the Act, PHFA is authorized
to provide mortgage assistance loans to homeowners facing foreclosure for reasons
beyond their control. Sections 401-C and 404-C of Act 91, 35 P.S. §§1680.401c,
1680.404c. If a homeowner qualifies for assistance, PHFA loans the homeowner

4
  This Court determines whether constitutional rights were violated, an error of law was
committed, or the findings of fact are not supported by substantial evidence. Fish v. Pennsylvania
Housing Finance Agency, 931 A.2d 764, 767 n.3 (Pa. Cmwlth. 2007).
                                                4
money to bring his or her mortgage current. The PHFA loan is secured by the
property and must be repaid with interest. Sections 405-C(g) and 406-C of Act 91,
35 P.S. §§1680.405c(g), 1680.406c. The homeowner may also be entitled to
monthly mortgage assistance payments from PHFA, Section 405-C(b) of Act 91,
35 P.S. §1680.405c(b), but the homeowner must be able to resume full monthly
mortgage payments within 24 months.          Section 405-C(f) of Act 91, 35 P.S.
§1680.405c(f).
             To qualify for a loan, a homeowner must show that he or she has a
reasonable prospect of resuming full mortgage payments within the required
timeframe. Section 404-C(a)(5) of Act 91 states, in relevant part, as follows:

             (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 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). To guide the evaluation of whether an
applicant has a reasonable prospect of resuming full mortgage payments, PHFA has
adopted a Statement of Policy.




                                         5
              The Statement of Policy identifies a number of factors relevant to the
applicant’s “reasonable prospect” of resuming mortgage payments. They include,
inter alia, the following:

              (2) Potential for future changes in the homeowner’s financial
              prospects through re-employment, schooling, training or debt
              reduction, or other income changes sufficient to enable the
              homeowner to resume full mortgage payments.

                                            ***
              (7) A homeowner’s demonstrated ability to make regular
              monthly mortgage payments, even though those payments
              represented most of the homeowner’s income. In determining
              whether the homeowner’s future job and income prospects will
              be sufficient to enable the homeowner to pay the mortgage
              debt—including principal, interest, taxes and insurance—the
              Agency will take into consideration the amount of household
              income available to the homeowner for a reasonable period of
              time not to exceed 24 months prior to the circumstances which
              caused the mortgage delinquency and whether the income was
              sufficient as evidenced by documentation, including tax returns,
              Internal Revenue Service Form W–2 and tax transcripts....

12 Pa. Code §31.206(a).5 The Statement of Policy states that lack of employment is
not dispositive where the applicant can demonstrate:

              (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 that prevents
              reemployment.



5
 This Court has explained, “Section 31.206 is a statement of policy, not a regulation, and thus
does not have the force and effect of law.” R.M. v. Pennsylvania Housing Finance Agency of
Commonwealth, 740 A.2d 302, 308 (Pa. Cmwlth. 1999).
                                              6
               (4) That he is actively seeking work, as evidenced by a written
               statement to that effect.

12 Pa. Code §31.206(b). On the other hand, PHFA “cannot base its determination
on speculative income.” Cullins v. Pennsylvania Housing Finance Agency, 623
A.2d 951, 954 (Pa. Cmwlth. 1993). Rather, it looks to an applicant’s actual income
history. Id.
               At time of his HEMAP loan application, Goss’s monthly expenses
totaled $1,266, and his average net monthly income was $302.92.6 By the time of
the hearing, Goss’s monthly expenses had increased to $1,311.83, but his average
net monthly income was unchanged. Given the extent to which Goss’s monthly
expenses exceeded his monthly income, PHFA found that Goss was overextended.
Thus, it concluded that there was no reasonable prospect of the applicant resuming
mortgage payments within the required timeframe.
               Goss argues that he has a reasonable prospect of resuming full mortgage
payments because of his educational background, work history, and the potential for
future income from his personal business, Rocket-7 Design. Goss has an associate
degree in applied sciences of architectural technology. He has owned and operated
Rocket-7 Design since 1994. Prior to his medical issues, he paid his mortgage in a
timely manner.
               PHFA must evaluate Goss’s eligibility based on his actual income
history. Cullins, 623 A.2d at 954. Goss did not produce any documentation of his
prior income history. Notably, Goss did not file federal income tax returns in 2013


6
  Goss’s income over the previous 12-month period totaled $4,846.71, or an average gross income
of $403.89 per month. PHFA permits a 25% deduction to cover the payment of federal, state and
local taxes, making Goss’s net monthly income $302.92. Adjudication, 9/29/2018, at 6-7; S.R.R.
6b-7b.
                                              7
or 2014, before his illness rendered him unable to work in November 2015. Further,
Goss’s bank statements and a profit and loss statement for Rocket-7 Design for the
past 12 months show annual income of approximately $4,800. Certified Record
(C.R.), Item No. 60 at 14-21.
              Goss testified that he is actively seeking work and that he “has the
ability to supplement his income with his established business.” Goss’s Brief at 30-
31. Problematically, Goss did not provide PHFA with any documentation of his past
income, such as tax returns, that could have demonstrated the level of income he will
likely earn in the near future through Rocket-7 Design. Goss believes that he can
return to earnings sufficient to cover his expenses, including the repayment of a
PHFA loan. However, this is speculation not supported by evidence. See Cullins,
623 A.2d at 954 (holding that PHFA’s determination of whether a homeowner has a
reasonable prospect of resuming mortgage payments cannot be based on speculative
income). Further, Goss’s receipt of “social security disability” suggests that his
employment opportunities are limited.
              Finally, Goss contends that he has a reasonable prospect of resuming
full mortgage payments because he now receives $771 a month in SSI benefits,
$22.10 a month in state supplemental payment (SSP) benefits, and $192 a month in
supplemental nutrition assistance program (SNAP) benefits.                  However, these
additional sources of income are not sufficient to cover his monthly expenses of
$1,211.08,7 which exceed his total average net monthly income of $1,096.02. Goss
is financially overextended and without sufficient income to maintain the mortgage.



7
  At the time of his appeal hearing, Goss’s monthly expenses totaled $1,311.08, which included
$100 in monthly grocery costs. His receipt of SNAP benefits would decrease his monthly expenses
to $1,211.08.
                                              8
            In sum, Goss did not present the evidence needed to establish that he
had a reasonable prospect of resuming full mortgage payments within 24 months of
the date of his mortgage delinquency and paying the mortgage off by its maturity.
Accordingly, PHFA’s adjudication must be affirmed.


                                  _____________________________________
                                  MARY HANNAH LEAVITT, President Judge




                                       9
          IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Jeffrey L. Goss,                            :
                           Petitioner       :
                                            :
             v.                             :   No. 1592 C.D. 2018
                                            :
Pennsylvania Housing Finance                :
Agency,                                     :
                       Respondent           :


                                        ORDER

             AND NOW, this 6th day of January, 2019, the adjudication of the
hearing examiner dated September 29, 2018, affirming the decision of the
Pennsylvania Housing Finance Agency to deny Jeffrey L. Goss’s application for a
loan under the Homeowner’s Emergency Mortgage Assistance Loan Program,8 is
AFFIRMED.
                                     _____________________________________
                                     MARY HANNAH LEAVITT, President Judge




8
 Act of December 3, 1959, P.L. 1688, No. 621, as amended, added by the Act of December 23,
1983, P.L. 385, No. 91, 35 P.S. §§1680.401c-1680.412c.
