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For Immediate
Release
12/5/07
Contact:
Lesley Crozier
(717) 787-1349
Committee Approves Mortgage Reform Bills
Legislation includes new licensing requirements
The Senate Banking and Insurance Committee approved four bills introduced by
Senator Pat Browne (R-16) targeting predatory and other questionable mortgage
lending practices in Pennsylvania.
Senator Browne said he was pleased with the Banking and Insurance Committee
approval of the bills on Tuesday (December 4) and hopes the full Senate will
expeditiously consider the legislation.
"There has been a tremendous amount of concern regarding the mortgage lending
industry and its problems over the last several years," Senator Browne said. "It
is incumbent upon us to adjust our banking codes and other codes to try to
better protect consumers in one of their most important decisions and that is
taking on a mortgage to secure a primary residence."
Senate Bill 483 would amend the Loan Interest and Protection Law of 1974 to
increase the monetary cap in the Act from $50,000 to $200,000.
Senate Bill 484 would permit the Department to publicly release information
on pending enforcement actions and fines levied against non-depository
licensees.
Senate Bill 487 would amend the Mortgage Bankers and Brokers and Consumer
Equity Protection Act to create a new licensing category for individual mortgage
originators who deal directly with the consumer by soliciting, accepting or
offering to accept mortgage loan applications or negotiating mortgage loan
terms.
Senate Bill 488 would amend the Secondary Mortgage Loan Act to create a new
licensing category for individual mortgage originators who deal directly with
the consumer by soliciting, accepting or offering to accept secondary mortgage
loans (home equity) applications or negotiating secondary mortgage loan terms.
"Right now mortgage lenders and brokers are licensed, but those who originate
the loans and go through paper work with the consumer and negotiate terms are
not," Senator Browne said. "This licensing category, which is being considered
by other states and the federal government, is an important to protect consumers
in the future. It's my belief that those in the business of soliciting,
advertising and dealing directly with consumers in regards to mortgage loans
should be required to have a basic fiduciary responsibility similar to other
circumstances where people are licensed to sell financial products in the
marketplace."
Senator Browne introduced the bills based on the findings of a mortgage
industry study mandated by House Resolution 364, which was adopted in 2003.
This Resolution directed the Department of Banking to study residential lending
practices in Pennsylvania, examine trends in foreclosures and document lending
practices that are harmful to consumers.
Last week, the Senate Urban Affairs and Housing Committee approved Senate
Bill 486, another bill in Senator Browne's mortgage reform package. SB 486
amends the Housing Finance Agency Law to require lenders to send copies of
foreclosure notices to the Pennsylvania Housing Finance Agency so that mortgage
foreclosures can be monitored on a statewide basis.
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