Unconsolidated Pennsylvania Statutes

INTEREST. (TITLE 41)

ARTICLE IV. PROTECTIVE PROVISIONS

§ 401. Disclosure requirements.
§ 401.1. Photocopies of security documents.
§ 402. Discount points prohibited.
§ 403. Notice of intention to foreclose.
§ 404. Right to cure a default.
§ 405. Prepayment penalty prohibited.
§ 406. Attorney's fees payable.
§ 407. Confession of judgment.
§ 408. Waivers.

§ 401. Disclosure requirements.

A residential mortgage lender shall provide to the residential mortgage debtor disclosures required by the "Truth in Lending Act," Title I, Public Law 90-321, 82 Stat. 146, and the "Real Estate Settlement Procedures Act of 1974" Public Law 93-533, 88 Stat. 1724, and regulations adopted pursuant thereto.

§ 401.1. Photocopies of security documents.

The copy of any security document required to be furnished to a residential mortgage debtor by the provisions of this act or any regulation promulgated pursuant thereto may be a photocopy thereof.

§ 402. Discount points prohibited.

With the exception of those residential mortgages guaranteed or insured in whole or in part by the Federal Government, or agency thereof, as enumerated in section 302 of this act, and with the exception of any actual settlement costs (but not discount points, as defined in this act) paid by a seller of real estate, it shall be unlawful for a residential mortgage lender to charge to or receive from a seller of real estate directly or indirectly any discount points.

§ 403. Notice of intention to foreclose.

(a) Before any residential mortgage lender may accelerate the maturity of any residential mortgage obligation, commence any legal action including mortgage foreclosure to recover under such obligation, or take possession of any security of the residential mortgage debtor for such residential mortgage obligation, such person shall give the residential mortgage debtor notice of such intention at least thirty days in advance as provided in this section.

(b) Notice of intention to take action as specified in subsection (a) of this section shall be in writing, sent to the residential mortgage debtor by registered or certified mail at his last known address and, if different, at the residence which is the subject of the residential mortgage.

(c) The written notice shall clearly and conspicuously state:

  1. The particular obligation or real estate security interest;
  2. The nature of the default claimed;
  3. The right of the debtor to cure the default as provided in section 404 of this act and exactly what performance including what sum of money, if any, must be tendered to cure the default;
  4. The time within which the debtor must cure the default;
  5. The method or methods by which the debtor's ownership or possession of the real estate may be terminated; and
  6. The right of the debtor, if any, to transfer the real estate to another person subject to the security interest or to refinance the obligation and of the transferee's right, if any, to cure the default.

(d) The notice of intention to foreclose provided in this section shall not be required where the residential mortgage debtor, has abandoned or voluntarily surrendered the property which is the subject of a residential mortgage.

§ 404. Right to cure a default.

(a) Notwithstanding the provisions of any other law, after a notice of intention to foreclose has been given pursuant to section 403 of this act, at any time at least one hour prior to the commencement of bidding at a sheriff sale or other judicial sale on a residential mortgage obligation, the residential mortgage debtor or anyone in his behalf, not more than three times in any calendar year, may cure his default and prevent sale or other disposition of the real estate and avoid acceleration, if any, by tendering the amount or performance specified in subsection (b) of this section.

(b) To cure a default under this section, a residential mortgage debtor shall:

  1. Pay or tender in the form of cash, cashier's check or certified check, all sums which would have been due at the time of payment or tender in the absence of default and the exercise of an acceleration clause, if any;
  2. Perform any other obligation which he would have been bound to perform in the absence of default or the exercise of an acceleration clause, if any;
  3. Pay or tender any reasonable fees allowed under section 406 and the reasonable costs of proceeding to foreclosure as specified in writing by the residential mortgage lender actually incurred to the date of payment.
  4. Pay any reasonable late penalty, if provided for in the security document.

(c) Cure of a default pursuant to this section restores the residential mortgage debtor to the same position as if the default had not occurred.

§ 405. Prepayment penalty prohibited.

Residential mortgage obligations contracted for on or after the effective date of this act may be prepaid without any penalty or other charge for such prepayment at any time before the end of the period of the loan.

§ 406. Attorney's fees payable.

With regard to residential mortgages, no residential mortgage lender shall contract for or receive attorney's fees from a residential mortgage debtor except as follows:

  1. Reasonable fees for services included in actual settlement costs.
  2. Upon commencement of foreclosure or other legal action with respect to a residential mortgage, attorney's fees which are reasonable and actually incurred by the residential mortgage lender may be charged to the residential mortgage debtor.
  3. Prior to commencement of foreclosure or other legal action attorney's fees which are reasonable and actually incurred not in excess of fifty dollars ($50) provided that no attorney's fees may be charged for legal expenses incurred prior to or during the thirty-day notice period provided in section 403 of this act.

§ 407. Confession of judgment.

(a) As to any residential real property, a plaintiff shall not have the right to levy, execute or garnish on the basis of any judgment or decree on confession, whether by amicable action or otherwise, or on a note, bond or other instrument in writing confessing judgment until plaintiff, utilizing such procedures as may be provided in the Pennsylvania Rules of Civil Procedure, files an appropriate action and proceeds to judgment or decree against defendant as in any original action. The judgment by confession shall be changed as may be appropriate by a judgment, order or decree entered by the court in the action. After the above mentioned original action has been prosecuted and a judgment obtained, that judgment shall merge with the confessed judgment and the confessed judgment shall be conformed as to amount and execution shall be had on the confessed judgment. The parties to the action shall have the same rights as parties to other original proceedings. Nothing in this act shall prohibit a residential mortgage lender from proceeding by action in mortgage foreclosure in lieu of judgment by confession if the residential mortgaeg lender so desires.

(b) Any debtor who prevails in any action to remove, suspend or enforce a judgment entered by confession shall be entitled to recover reasonable attorney's fees and costs as determined by the court.

(c) Hereafter when any plaintiff has received payment in full for any judgment entered by confession he shall order the record in the proceeding marked satisfied within thirty days of the receipt thereof, and shall not require any action on the part of the defendant or any payment by him to cover the cost of satisfying the judgment.

§ 408. Waivers.

Notwithstanding any other law, the provisions of this act may not be waived by any oral or written agreement executed by any person.


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INTEREST - TITLE 41 - Protective Provisions / Judiciary@aol.com / last revised December 1999