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For Immediate
Release
2/11/08
Contact:
Lesley Crozier
(717) 787-1349
Appropriations Committee Approves Mortgage
Reform Bills
Senator Browne's Legislative package headed for final Senate vote
The Senate Appropriations Committee today (February 11) approved six bills
introduced by Senator Pat Browne (R-16) targeting predatory and other
questionable mortgage lending practices in Pennsylvania.
The Committee's approval sets the stage for a final vote by the Senate on
Senate Bills 483, 484, 485, 486, 487 and 488.
"I am pleased that the Appropriations Committee reported these bills out and
sent them on to the full Senate for a final vote. 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. "The most
important protection is eliminating pre-payment penalties for loans $200,000 or
less," said Senator Browne.
Senate Bill 484 would permit the Department to publicly release information
on pending enforcement actions and fines levied against non-depository
licensees.
Senate Bill 485 would amend the Real estate Appraisers Certification Act
regarding board membership, disciplinary measures and penalties.
Senate Bill 486 would amend 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.
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.
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