HOUSE AMENDED
PRIOR PRINTER'S NOS. 390, 736, 942 PRINTER'S NO. 1240
No. 377 Session of 2001
INTRODUCED BY WENGER, PICCOLA, ARMSTRONG, M. WHITE, THOMPSON,
GREENLEAF, WAUGH, ROBBINS, TARTAGLIONE, BOSCOLA, MOWERY,
WOZNIAK, STOUT AND LEMMOND, FEBRUARY 8, 2001
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
JUNE 21, 2001
AN ACT
1 Amending the act of December 22, 1989 (P.L.687, No.90), entitled
2 "An act providing for the regulation and licensing of
3 mortgage bankers and mortgage brokers; imposing additional
4 powers and duties on the Department of Banking and the State
5 Real Estate Commission; and providing penalties," further
6 providing for license exemptions, for application for
7 license, for licensee requirements, for authority of
8 department or commission and for penalties; REGULATING THE <--
9 TERMS AND CONDITIONS OF CERTAIN SUBPRIME MORTGAGE LOAN
10 TRANSACTIONS; AND MAKING EDITORIAL CHANGES.
11 The General Assembly of the Commonwealth of Pennsylvania
12 hereby enacts as follows:
13 Section 1. Sections 3, 4(c)(1) and (e) and 8(a)(5) of the <--
14 act of December 22, 1989 (P.L.687, No.90), known as the Mortgage
15 Bankers and Brokers Act, amended December 21, 1998 (P.L.987,
16 No.131), are amended to read:
17 Section 3. License requirements and exemptions.
18 (a) License required.--On and after the effective date of
19 this act, no person shall act as a mortgage banker, loan
20 correspondent, mortgage broker or limited mortgage broker in
1 this Commonwealth without a license as provided for in this act,
2 provided, however, that any person licensed as a mortgage banker
3 may also act as a loan correspondent or mortgage broker and any
4 person licensed as a loan correspondent may also act as a
5 mortgage broker without a separate license. A person licensed as
6 a mortgage broker may only perform the services of a mortgage
7 broker as defined in section 2.
8 (b) Exceptions.--The following persons shall not be required
9 to be licensed under this act in order to conduct the first
10 mortgage loan business but shall be subject to those provisions
11 of this act as specifically provided in this section:
12 (1) A State-chartered bank, bank and trust company,
13 savings bank, private bank or national bank, a State or
14 federally chartered savings and loan association, a federally
15 chartered savings bank or a State or federally chartered
16 credit union.
17 (2) An attorney authorized to practice law in this
18 Commonwealth, who acts as a mortgage broker in negotiating or
19 placing a mortgage loan in the normal course of legal
20 practice.
21 (3) A person licensed pursuant to the provisions of the
22 act of February 19, 1980 (P.L.15, No.9), known as the Real
23 Estate Licensing and Registration Act, who is principally
24 engaged in a third-party real estate brokerage business, but
25 only to the extent that he provides information, verbal or
26 written, to or negotiates or places a mortgage loan for a
27 buyer of real estate and is not compensated by the buyer or
28 any other person for providing such information or
29 negotiating or placing such mortgage loan. If he is
30 compensated for providing such information or negotiating or
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1 placing such mortgage loan, he shall be subject to the
2 provisions of sections 8, 10, 11 and 14(b), excluding section
3 8(a)(1).
4 (4) A seller of a dwelling, if he has resided in the
5 dwelling at least one year and as part of the purchase price
6 receives a first mortgage executed by the purchaser.
7 (5) A person who either originates or negotiates less
8 than three mortgage loans in a calendar year in this
9 Commonwealth unless he is otherwise deemed to be engaged in
10 the first mortgage loan business.
11 (6) Builders, when obtaining mortgages for their own
12 construction or for the sale of their own construction.
13 (7) Any agency or instrumentality of the Federal
14 Government or a corporation otherwise created by an act of
15 the United States Congress, including, but not limited to,
16 the Federal National Mortgage Association, the Government
17 National Mortgage Association, the Veterans' Administration,
18 the Federal Home Loan Mortgage Corporation and the Federal
19 Housing Administration.
20 (8) The Pennsylvania Housing Finance Agency.
21 (9) A licensee under the act of April 8, l937 (P.L.262,
22 No.66), known as the Consumer Discount Company Act, except
23 that any such licensee who makes a mortgage loan other than
24 under the provisions of that act shall be subject to the
25 provisions of sections 4(b)(2) and (3), 8, 10 and 14(b) of
26 this act, excluding section 8(a)(1).
27 (10) Except for licensees described in paragraph (9),
28 subsidiaries and affiliates of the following institutions:
29 State-chartered banks, bank and trust companies, savings
30 banks, private banks, savings and loan associations and
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1 credit unions or national banks, federally chartered savings
2 and loan associations, federally chartered savings banks and
3 federally chartered credit unions, except that such
4 subsidiaries and affiliates of institutions enumerated in
5 this paragraph shall:
6 (i) be subject to the provisions of sections 8,
7 9(a)(3), 10 and 14(b), excluding section 8(a)(1);
8 (ii) deliver as required to the department annually
9 copies of financial reports made to all supervisory
10 agencies; and
11 (iii) be registered with the department.
12 (11) Employees of a mortgage banker, mortgage broker and
13 loan correspondent licensee or excepted persons acting for
14 their employers.
15 (12) An insurance company, association or exchange
16 authorized to transact business in this Commonwealth under
17 the act of May 17, 1921 (P.L.682, No.284), known as The
18 Insurance Company Law of 1921, and any subsidiaries and
19 affiliates thereof, except that such subsidiaries and
20 affiliates shall:
21 (i) be subject to the provisions of sections 8,
22 9(a)(3), 10 and 14(b), excluding section 8(a)(1);
23 (ii) deliver as required to the department annually
24 copies of financial reports made to all supervisory
25 agencies; and
26 (iii) be registered with the department.
27 (13) Any person who makes a mortgage loan to an employee
28 of that person as an employment benefit, given that person
29 does not hold himself out to the public as a first mortgage
30 lender.
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1 (14) Nonprofit corporations making mortgage loans to
2 promote home ownership or improvements for the disadvantaged,
3 given that the corporation does not hold itself out to the
4 public as a first mortgage lender.
5 (15) A nonprofit corporation making not more than 12
6 mortgage loans a calendar year with its own funds, that shall
7 not include funds borrowed through warehouse lines of credit
8 or other sources for the purpose of making mortgage loans,
9 which loans are retained in the corporation's own portfolios
10 and not regularly sold to others and are made to promote and
11 advance the cultural traditions and lifestyles of bona fide
12 religious organizations provided that the corporation does
13 not hold itself out to the public as a first mortgage lender.
14 (c) Loans for business or commercial purposes.--This act
15 shall not apply to mortgage loans made for business or
16 commercial purposes.
17 Section 4. Application for license.
18 * * *
19 (c) Mortgage broker's license.--
20 (1) The department shall issue a mortgage broker's
21 license applied for pursuant to this act if the applicant
22 establishes that he is eligible to and will obtain and
23 maintain a bond in the amount of $100,000, in a form
24 acceptable to the department, prior to the issuance of the
25 license, from a surety company authorized to do business in
26 this Commonwealth. The bond shall be a penal bond conditioned
27 on compliance with this act and subject to forfeiture by the
28 department and shall run to the Commonwealth of Pennsylvania
29 [and shall be for the use of the Commonwealth and] for its
30 use. The bond shall also be for the use of any person [or
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1 persons] against the mortgage broker for failure to carry out
2 the terms of any provision for which advance fees are paid.
3 If such person [or persons shall be so] is aggrieved, he may
4 [upon recovering judgment against such licensee issue
5 execution under such judgment and maintain an action upon the
6 bond of the licensee in any court having jurisdiction for the
7 amount claimed plus costs, provided the department assents
8 thereto.] with the written assent of the department, recover
9 advance fees and costs from the bond by filing a claim with
10 the surety company or maintaining an action on the bond. In
11 the alternative, an aggrieved person may recover advance fees
12 and costs by filing a formal complaint against the mortgage
13 broker with the department which shall adjudicate the matter.
14 Such an adjudication shall be binding upon the surety company
15 and enforceable by the department in Commonwealth Court and
16 by an aggrieved person in any court. Any aggrieved person
17 seeking to recover advance fees and costs from a bond that
18 has already been forfeited by the department or which the
19 department is in the process of forfeiting may recover
20 payment on such bond if, after filing a petition with the
21 department, the department assents to his requested payment
22 or portion thereof. The department may pay the aggrieved
23 person from the bond proceeds it recovered in such case.
24 Nothing in this section shall be construed as limiting the
25 ability of any court or district justice to award to any
26 aggrieved person other damages, court costs and attorney fees
27 as permitted by law, but those claims that are not advance
28 fees or related costs may not be recovered from the bond. The
29 department, in its discretion, may assent to or order pro
30 rata or other recovery on the bond for any aggrieved person
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1 if claims against the bond may or do exceed its full monetary
2 amount. No bond shall comply with the requirements of this
3 section unless it contains a provision that it shall not be
4 canceled for any cause unless notice of intention to cancel
5 is given to the department at least 30 days before the day
6 upon which cancellation shall take effect. Cancellation of
7 the bond shall not invalidate the bond regarding the period
8 of time it was in effect.
9 * * *
10 (e) Education.--To maintain a mortgage banker's, a loan
11 correspondent's or a mortgage broker's license, the applicant or
12 licensee shall demonstrate to the satisfaction of the secretary
13 that at least one [person] individual from each licensed office
14 has attended a minimum of six hours of such continuing education
15 each year. To maintain a limited mortgage broker's license, the
16 licensee shall demonstrate to the satisfaction of the secretary
17 that he has attended at least two hours of continuing education
18 each year. The secretary shall delineate the requirements for
19 such continuing education by regulation within three years of
20 the effective date of this act. The secretary may review and
21 approve continuing education programs and providers to satisfy
22 the continuing education requirement. The secretary may charge
23 providers of continuing education programs a fee, to be
24 determined by the secretary, for department review of continuing
25 education programs and providers.
26 Section 8. Licensee requirements.
27 (a) Requirements on licensee.--A licensee shall:
28 * * *
29 (5) Comply with all provisions of the act of January 30,
30 1974 (P.L.13, No.6), referred to as the Loan Interest and
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1 Protection Law, provided, however, that this shall not be
2 deemed an override of section 501 of the Depository
3 Institutions Deregulation and Monetary Control Act of 1980
4 (94 Stat. 161, 12 U.S.C. § [1735f-7 note] 1735f-7a).
5 * * *
6 Section 2. Section 10(c) of the act is amended to read:
7 Section 10. Authority of department or commission.
8 * * *
9 (c) Powers.--The department and the commission shall have
10 the authority to:
11 (1) Examine any instrument, document, account, book,
12 record or file of a licensee or any other person, or make
13 such other investigation as may be necessary to administer
14 the provisions of this act.
15 (2) Conduct administrative hearings on any matter
16 pertaining to this act, issue subpoenas to compel the
17 attendance of witnesses and the production of instruments,
18 documents, accounts, books and records at any such hearing,
19 which may be retained by the department or commission until
20 the completion of all proceedings in connection with which
21 they were produced, and administer oaths and affirmations to
22 any person whose testimony is required. In the event a person
23 fails to comply with a subpoena issued by the department or
24 commission or to testify on any matter concerning which he
25 may be lawfully interrogated, on application by the
26 department or commission, the Commonwealth Court may issue an
27 order requiring the attendance of such person, the production
28 of instruments, documents, accounts, books or records or the
29 giving of testimony.
30 (3) Request and/or receive any information or records of
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1 any kind, including a report of criminal history record
2 information, from any Federal, State, local or foreign
3 government entity, regarding any applicant for a license,
4 licensee or any person related in any way to the business of
5 such applicant or licensee, at a cost to be paid by the
6 applicant or licensee.
7 * * *
8 Section 3. Section 14(b) of the act, amended December 21,
9 1998 (P.L.987, No.131), is amended to read:
10 Section 14. Penalties.
11 * * *
12 (b) Nonlicensees subject to the provisions of this act.--Any
13 person who is subject to the provisions of this act, even though
14 not licensed hereunder, or any person who is not licensed by the
15 department or is not exempt from the licensing requirements, who
16 violates any of the provisions to which it is subject shall be
17 subject to a fine levied by the department or commission of up
18 to $2,000 for each offense. Any such nonlicensed person who
19 commits three or more offenses may, at the discretion of the
20 department or commission, be prohibited from engaging in [the
21 business of a mortgage broker or mortgage banker] the first
22 mortgage loan business unless licensed under this act.
23 * * *
24 Section 4. This act shall take effect in 60 days.
25 SECTION 1. THE ACT OF DECEMBER 22, 1989 (P.L.687, NO.90), <--
26 KNOWN AS THE MORTGAGE BANKERS AND BROKERS ACT, IS AMENDED BY
27 ADDING A CHAPTER AND A CHAPTER HEADING TO READ:
28 CHAPTER 1
29 PRELIMINARY PROVISIONS
30 SECTION 101. SHORT TITLE.
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1 THIS ACT SHALL BE KNOWN AND MAY BE CITED AS THE MORTGAGE
2 BANKERS AND BROKERS AND CONSUMER EQUITY PROTECTION ACT.
3 SECTION 102. DEFINITIONS.
4 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS ACT SHALL
5 HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
6 CONTEXT CLEARLY INDICATES OTHERWISE:
7 "DEPARTMENT." THE DEPARTMENT OF BANKING OF THE COMMONWEALTH.
8 CHAPTER 3
9 LICENSURE
10 SECTION 2. SECTION 1 OF THE ACT IS AMENDED TO READ:
11 SECTION [1] 301. [SHORT TITLE] SCOPE.
12 THIS [ACT SHALL BE KNOWN AND MAY BE CITED AS THE MORTGAGE
13 BANKERS AND BROKERS ACT] CHAPTER DEALS WITH LICENSURE.
14 SECTION 3. SECTIONS 2, 3, 4, 5, 6, 7, 8, 9, 10 AND 11 OF THE
15 ACT, AMENDED DECEMBER 21, 1998 (P.L.987, NO.131), ARE AMENDED TO
16 READ:
17 SECTION [2] 302. DEFINITIONS.
18 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS [ACT]
19 CHAPTER SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION
20 UNLESS THE CONTEXT CLEARLY INDICATES OTHERWISE:
21 "ADVANCE FEE." ANY FUNDS REQUESTED BY OR TO BE PAID TO A
22 LOAN CORRESPONDENT, MORTGAGE BROKER OR LIMITED MORTGAGE BROKER
23 IN ADVANCE OF OR DURING THE PROCESSING OF A MORTGAGE LOAN
24 APPLICATION, EXCLUDING THOSE FEES PAID BY AN APPLICANT BORROWER
25 DIRECTLY TO A CREDIT AGENCY REPORTING BUREAU, TITLE COMPANY OR
26 REAL ESTATE APPRAISER.
27 "BRANCH." AN OFFICE OR OTHER PLACE OF BUSINESS LOCATED IN
28 THIS COMMONWEALTH OR ANY OTHER STATE, OTHER THAN THE PRINCIPAL
29 PLACE OF BUSINESS, WHERE A PERSON ENGAGES IN THE FIRST MORTGAGE
30 LOAN BUSINESS WHICH FALLS UNDER THE SCOPE OF THIS [ACT] CHAPTER.
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1 "COMMISSION." THE STATE REAL ESTATE COMMISSION.
2 ["DEPARTMENT." THE DEPARTMENT OF BANKING OF THE
3 COMMONWEALTH.]
4 "FINDER'S FEE" OR "REFERRAL FEE." ANY PAYMENT OF MONEY OR
5 OTHER CONSIDERATION FOR THE REFERRAL OF A MORTGAGE LOAN TO A
6 LENDER, BUT SHALL NOT INCLUDE CONSIDERATION PAID FOR GOODS OR
7 FACILITIES ACTUALLY FURNISHED OR SERVICES ACTUALLY PERFORMED.
8 "FIRST MORTGAGE LOAN BUSINESS." A PERSON IS DEEMED TO BE
9 ENGAGED IN THE FIRST MORTGAGE LOAN BUSINESS IN THIS COMMONWEALTH
10 IF THAT PERSON ADVERTISES, CAUSES TO BE ADVERTISED, SOLICITS,
11 NEGOTIATES OR ARRANGES IN THE ORDINARY COURSE OF BUSINESS,
12 OFFERS TO MAKE OR MAKES MORE THAN TWO FIRST MORTGAGE LOANS IN A
13 CALENDAR YEAR IN THIS COMMONWEALTH, WHETHER DIRECTLY OR BY ANY
14 PERSON ACTING FOR HIS BENEFIT.
15 "LICENSEE." A PERSON WHO IS LICENSED UNDER THIS [ACT]
16 CHAPTER.
17 "LIMITED MORTGAGE BROKER." AN INDIVIDUAL WHO DIRECTLY OR
18 INDIRECTLY NEGOTIATES OR PLACES NONPURCHASE MONEY MORTGAGE LOANS
19 FOR OTHERS IN THE PRIMARY MARKET FOR CONSIDERATION.
20 "LOAN CORRESPONDENT." A PERSON WHO, IN THE REGULAR COURSE OF
21 BUSINESS, DIRECTLY OR INDIRECTLY ORIGINATES AND CLOSES LOANS IN
22 HIS OWN NAME UTILIZING FUNDS PROVIDED BY A WHOLESALE TABLE
23 FUNDER AND SIMULTANEOUSLY ASSIGNS THE LOANS TO THE WHOLESALE
24 TABLE FUNDER. A LOAN CORRESPONDENT MAY CLOSE A MORTGAGE LOAN
25 UTILIZING OTHER FUNDING SOURCES BUT ONLY IN AN EMERGENCY
26 CIRCUMSTANCE WHERE WHOLESALE TABLE FUNDING IS NOT AVAILABLE.
27 "LOCK-IN AGREEMENT." AN AGREEMENT BETWEEN A MORTGAGE BANKER
28 OR LOAN CORRESPONDENT AND BORROWER WHEREBY THE LICENSEE
29 GUARANTEES UNTIL A SPECIFIED DATE THE AVAILABILITY OF A
30 SPECIFIED RATE OF INTEREST OR SPECIFIED FORMULA BY WHICH THE
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1 RATE OF INTEREST AND/OR A SPECIFIC NUMBER OF DISCOUNT POINTS
2 WILL BE DETERMINED, PROVIDED THE LOAN IS APPROVED AND CLOSED BY
3 THE SPECIFIED DATE. IF A SPECIFIED DATE IS NOT DETERMINABLE, THE
4 LICENSEE MAY FULFILL THE REQUIREMENT OF THIS PROVISION BY
5 SETTING FORTH WITH SPECIFICITY THE METHOD BY WHICH THE DURATION
6 OF THE LOCK-IN PERIOD WILL BE DETERMINED.
7 "MORTGAGE BANKER." A PERSON WHO DIRECTLY OR INDIRECTLY
8 ORIGINATES AND CLOSES MORTGAGE LOANS WITH ITS OWN FUNDS IN THE
9 PRIMARY MARKET FOR CONSIDERATION.
10 "MORTGAGE BROKER." A PERSON WHO DIRECTLY OR INDIRECTLY
11 NEGOTIATES OR PLACES MORTGAGE LOANS FOR OTHERS IN THE PRIMARY
12 MARKET FOR CONSIDERATION.
13 "MORTGAGE LOAN." A LOAN WHICH IS SECURED BY A FIRST MORTGAGE
14 OR OTHER SIMILAR INSTRUMENT OR DOCUMENT WHICH CREATES A FIRST
15 LIEN ON REAL PROPERTY, WHICH REAL PROPERTY IS USED AS A ONE-
16 FAMILY TO FOUR-FAMILY DWELLING, A PORTION OF WHICH MAY BE USED
17 FOR NONRESIDENTIAL PURPOSES.
18 "NONPURCHASE MONEY MORTGAGE LOAN." A MORTGAGE LOAN [AS
19 DEFINED IN THIS ACT] THE PROCEEDS OF WHICH ARE NOT USED TO
20 FINANCE THE PURCHASE OF THE REAL PROPERTY SECURING THE MORTGAGE
21 LOAN.
22 "PERSON." AN INDIVIDUAL, ASSOCIATION, JOINT VENTURE OR
23 JOINT-STOCK COMPANY, PARTNERSHIP, LIMITED PARTNERSHIP, LIMITED
24 PARTNERSHIP ASSOCIATION, BUSINESS CORPORATION, NONPROFIT
25 CORPORATION, OR ANY OTHER GROUP OF INDIVIDUALS, HOWEVER
26 ORGANIZED.
27 "PRIMARY MARKET." THE MARKET WHEREIN MORTGAGE LOANS ARE
28 ORIGINATED BETWEEN A LENDER AND A BORROWER.
29 "PRINCIPAL PLACE OF BUSINESS." THE PRIMARY OFFICE OF THE
30 LICENSEE LOCATED IN THIS COMMONWEALTH WHICH IS STAFFED ON A
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1 FULL-TIME BASIS AND AT WHICH BOOKS, RECORDS, ACCOUNTS AND
2 DOCUMENTS ARE TO BE MAINTAINED.
3 "SECRETARY." THE SECRETARY OF BANKING OF THE COMMONWEALTH OR
4 HIS DESIGNEE.
5 "SERVICE A MORTGAGE LOAN." THE COLLECTION OR REMITTANCE OF
6 PAYMENTS FOR ANOTHER OR THE RIGHT TO COLLECT OR REMIT PAYMENTS
7 FOR ANOTHER OF PRINCIPAL, INTEREST, TAXES, INSURANCE AND ANY
8 OTHER PAYMENTS PURSUANT TO A MORTGAGE LOAN.
9 "TANGIBLE NET WORTH." NET WORTH LESS THE FOLLOWING ASSETS:
10 (1) THAT PORTION OF ANY ASSETS PLEDGED TO SECURE
11 OBLIGATIONS OF ANY PERSON OR ENTITY OTHER THAN THAT OF THE
12 APPLICANT.
13 (2) ANY ASSET, EXCEPT CONSTRUCTION LOANS RECEIVABLES
14 SECURED BY FIRST MORTGAGES FROM RELATED COMPANIES, DUE FROM
15 OFFICERS OR STOCKHOLDERS OF THE APPLICANT OR RELATED
16 COMPANIES IN WHICH THE APPLICANT'S OFFICERS OR STOCKHOLDERS
17 HAVE AN INTEREST.
18 (3) THAT PORTION OF THE VALUE OF ANY MARKETABLE
19 SECURITY, LISTED OR UNLISTED, NOT SHOWN AT LOWER OF COST OR
20 MARKET, EXCEPT FOR ANY SHARES OF FEDERAL NATIONAL MORTGAGE
21 ASSOCIATION STOCK REQUIRED TO BE HELD UNDER A SERVICING
22 AGREEMENT, WHICH SHOULD BE CARRIED AT COST.
23 (4) ANY AMOUNT IN EXCESS OF THE LOWER OF THE COST OR
24 MARKET VALUE OF MORTGAGES IN FORECLOSURES, CONSTRUCTION LOANS
25 OR FORECLOSED PROPERTY ACQUIRED BY THE APPLICANT THROUGH
26 FORECLOSURE.
27 (5) ANY INVESTMENT SHOWN ON THE BALANCE SHEET IN THE
28 APPLICANT'S JOINT VENTURES, SUBSIDIARIES, AFFILIATES OR
29 RELATED COMPANIES WHICH IS GREATER THAN THE VALUE OF THE
30 ASSETS AT EQUITY.
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1 (6) GOODWILL.
2 (7) THE VALUE PLACED ON INSURANCE RENEWALS OR PROPERTY
3 MANAGEMENT CONTRACT RENEWALS OR OTHER SIMILAR INTANGIBLES OF
4 THE APPLICANT.
5 (8) ORGANIZATION COSTS OF THE APPLICANT.
6 (9) THE VALUE OF ANY SERVICING CONTRACTS HELD BY THE
7 APPLICANT NOT DETERMINED IN ACCORDANCE WITH AMERICAN
8 INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS STATEMENT OF
9 POSITION 76-2, DATED AUGUST 25, 1976, OR SUBSEQUENT REVISION
10 THERETO.
11 (10) ANY REAL ESTATE HELD FOR INVESTMENT WHERE
12 DEVELOPMENT WILL NOT START WITHIN TWO YEARS FROM THE DATE OF
13 ITS INITIAL ACQUISITION.
14 (11) ANY LEASEHOLD IMPROVEMENTS NOT BEING AMORTIZED OVER
15 THE LESSER OF THE EXPECTED LIFE OF THE ASSET OR THE REMAINING
16 TERM OF THE LEASE.
17 (12) ANY COMMITMENT FEES PAID OR COLLECTED WHICH ARE NOT
18 RECOVERABLE THROUGH THE CLOSING OR SELLING OF LOANS.
19 "WHOLESALE TABLE FUNDER." A LICENSED MORTGAGE BANKER OR AN
20 ENTITY EXEMPT PURSUANT TO SECTION [3(B)(1), (10) OR (12)]
21 303(B)(1), (10) OR (12) WHO, IN THE REGULAR COURSE OF BUSINESS,
22 PROVIDES THE FUNDING FOR THE CLOSING OF MORTGAGE LOANS THROUGH
23 LOAN CORRESPONDENTS AND WHO BY ASSIGNMENT OBTAINS TITLE TO SUCH
24 MORTGAGE LOANS.
25 SECTION [3] 303. LICENSE REQUIREMENTS AND EXEMPTIONS.
26 (A) LICENSE REQUIRED.--ON AND AFTER THE EFFECTIVE DATE OF
27 THIS ACT, NO PERSON SHALL ACT AS A MORTGAGE BANKER, LOAN
28 CORRESPONDENT, MORTGAGE BROKER OR LIMITED MORTGAGE BROKER IN
29 THIS COMMONWEALTH WITHOUT A LICENSE AS PROVIDED FOR IN THIS
30 [ACT] CHAPTER, PROVIDED, HOWEVER, THAT ANY PERSON LICENSED AS A
20010S0377B1240 - 14 -
1 MORTGAGE BANKER MAY ALSO ACT AS A LOAN CORRESPONDENT OR MORTGAGE
2 BROKER AND ANY PERSON LICENSED AS A LOAN CORRESPONDENT MAY ALSO
3 ACT AS A MORTGAGE BROKER WITHOUT A SEPARATE LICENSE. A PERSON
4 LICENSED AS A MORTGAGE BROKER MAY ONLY PERFORM THE SERVICES OF A
5 MORTGAGE BROKER [AS DEFINED IN SECTION 2].
6 (B) EXCEPTIONS.--THE FOLLOWING PERSONS SHALL NOT BE REQUIRED
7 TO BE LICENSED UNDER THIS [ACT] CHAPTER IN ORDER TO CONDUCT THE
8 FIRST MORTGAGE LOAN BUSINESS BUT SHALL BE SUBJECT TO THOSE
9 PROVISIONS OF THIS [ACT]CHAPTER AS SPECIFICALLY PROVIDED IN THIS
10 SECTION:
11 (1) A STATE-CHARTERED BANK, BANK AND TRUST COMPANY,
12 SAVINGS BANK, PRIVATE BANK OR NATIONAL BANK, A STATE OR
13 FEDERALLY CHARTERED SAVINGS AND LOAN ASSOCIATION, A FEDERALLY
14 CHARTERED SAVINGS BANK OR A STATE OR FEDERALLY CHARTERED
15 CREDIT UNION.
16 (2) AN ATTORNEY AUTHORIZED TO PRACTICE LAW IN THIS
17 COMMONWEALTH, WHO ACTS AS A MORTGAGE BROKER IN NEGOTIATING OR
18 PLACING A MORTGAGE LOAN IN THE NORMAL COURSE OF LEGAL
19 PRACTICE.
20 (3) A PERSON LICENSED PURSUANT TO THE PROVISIONS OF THE
21 ACT OF FEBRUARY 19, 1980 (P.L.15, NO.9), KNOWN AS THE REAL
22 ESTATE LICENSING AND REGISTRATION ACT, WHO IS PRINCIPALLY
23 ENGAGED IN A THIRD-PARTY REAL ESTATE BROKERAGE BUSINESS, BUT
24 ONLY TO THE EXTENT THAT HE PROVIDES INFORMATION, VERBAL OR
25 WRITTEN, TO OR NEGOTIATES OR PLACES A MORTGAGE LOAN FOR A
26 BUYER OF REAL ESTATE AND IS NOT COMPENSATED BY THE BUYER OR
27 ANY OTHER PERSON FOR PROVIDING SUCH INFORMATION OR
28 NEGOTIATING OR PLACING SUCH MORTGAGE LOAN. IF HE IS
29 COMPENSATED FOR PROVIDING SUCH INFORMATION OR NEGOTIATING OR
30 PLACING SUCH MORTGAGE LOAN, HE SHALL BE SUBJECT TO THE
20010S0377B1240 - 15 -
1 PROVISIONS OF SECTIONS [8, 10, 11 AND 14(B)] 308, 310, 311
2 AND 314(B), EXCLUDING SECTION [8(A)(1)] 308(A)(1).
3 (4) A SELLER OF A DWELLING, IF HE HAS RESIDED IN THE
4 DWELLING AT LEAST ONE YEAR AND AS PART OF THE PURCHASE PRICE
5 RECEIVES A FIRST MORTGAGE EXECUTED BY THE PURCHASER.
6 (5) A PERSON WHO EITHER ORIGINATES OR NEGOTIATES LESS
7 THAN THREE MORTGAGE LOANS IN A CALENDAR YEAR IN THIS
8 COMMONWEALTH UNLESS HE IS OTHERWISE DEEMED TO BE ENGAGED IN
9 THE FIRST MORTGAGE LOAN BUSINESS.
10 (6) BUILDERS, WHEN OBTAINING MORTGAGES FOR THEIR OWN
11 CONSTRUCTION OR FOR THE SALE OF THEIR OWN CONSTRUCTION.
12 (7) ANY AGENCY OR INSTRUMENTALITY OF THE FEDERAL
13 GOVERNMENT OR A CORPORATION OTHERWISE CREATED BY AN ACT OF
14 THE UNITED STATES CONGRESS, INCLUDING, BUT NOT LIMITED TO,
15 THE FEDERAL NATIONAL MORTGAGE ASSOCIATION, THE GOVERNMENT
16 NATIONAL MORTGAGE ASSOCIATION, THE VETERANS' ADMINISTRATION,
17 THE FEDERAL HOME LOAN MORTGAGE CORPORATION AND THE FEDERAL
18 HOUSING ADMINISTRATION.
19 (8) THE PENNSYLVANIA HOUSING FINANCE AGENCY.
20 (9) A LICENSEE UNDER THE ACT OF APRIL 8, L937 (P.L.262,
21 NO.66), KNOWN AS THE CONSUMER DISCOUNT COMPANY ACT, EXCEPT
22 THAT ANY SUCH LICENSEE WHO MAKES A MORTGAGE LOAN OTHER THAN
23 UNDER THE PROVISIONS OF THAT ACT SHALL BE SUBJECT TO THE
24 PROVISIONS OF SECTIONS [4(B)(2) AND (3), 8, 10 AND 14(B) OF
25 THIS ACT] 304(B)(2) AND (3), 308, 310 AND 314(B), EXCLUDING
26 SECTION [8(A)(1)] 308(A)(1).
27 (10) EXCEPT FOR LICENSEES DESCRIBED IN PARAGRAPH (9),
28 SUBSIDIARIES AND AFFILIATES OF THE FOLLOWING INSTITUTIONS:
29 STATE-CHARTERED BANKS, BANK AND TRUST COMPANIES, SAVINGS
30 BANKS, PRIVATE BANKS, SAVINGS AND LOAN ASSOCIATIONS AND
20010S0377B1240 - 16 -
1 CREDIT UNIONS OR NATIONAL BANKS, FEDERALLY CHARTERED SAVINGS
2 AND LOAN ASSOCIATIONS, FEDERALLY CHARTERED SAVINGS BANKS AND
3 FEDERALLY CHARTERED CREDIT UNIONS, EXCEPT THAT SUCH
4 SUBSIDIARIES AND AFFILIATES OF INSTITUTIONS ENUMERATED IN
5 THIS PARAGRAPH SHALL:
6 (I) BE SUBJECT TO THE PROVISIONS OF SECTIONS [8,
7 9(A)(3), 10 AND 14(B)] 308, 309(A)(3), 310 AND 314(B),
8 EXCLUDING SECTION [8(A)(1)] 308(A)(1);
9 (II) DELIVER AS REQUIRED TO THE DEPARTMENT ANNUALLY
10 COPIES OF FINANCIAL REPORTS MADE TO ALL SUPERVISORY
11 AGENCIES; AND
12 (III) BE REGISTERED WITH THE DEPARTMENT.
13 (11) EMPLOYEES OF A MORTGAGE BANKER, MORTGAGE BROKER AND
14 LOAN CORRESPONDENT LICENSEE OR EXCEPTED PERSONS ACTING FOR
15 THEIR EMPLOYERS.
16 (12) AN INSURANCE COMPANY, ASSOCIATION OR EXCHANGE
17 AUTHORIZED TO TRANSACT BUSINESS IN THIS COMMONWEALTH UNDER
18 THE ACT OF MAY 17, 1921 (P.L.682, NO.284), KNOWN AS THE
19 INSURANCE COMPANY LAW OF 1921, AND ANY SUBSIDIARIES AND
20 AFFILIATES THEREOF, EXCEPT THAT SUCH SUBSIDIARIES AND
21 AFFILIATES SHALL:
22 (I) BE SUBJECT TO THE PROVISIONS OF SECTIONS [8,
23 9(A)(3), 10 AND 14(B)] 308, 309(A)(3), 310 AND 314(B),
24 EXCLUDING SECTION [8(A)(1)] 308(A)(1);
25 (II) DELIVER AS REQUIRED TO THE DEPARTMENT ANNUALLY
26 COPIES OF FINANCIAL REPORTS MADE TO ALL SUPERVISORY
27 AGENCIES; AND
28 (III) BE REGISTERED WITH THE DEPARTMENT.
29 (13) ANY PERSON WHO MAKES A MORTGAGE LOAN TO AN EMPLOYEE
30 OF THAT PERSON AS AN EMPLOYMENT BENEFIT, GIVEN THAT PERSON
20010S0377B1240 - 17 -
1 DOES NOT HOLD HIMSELF OUT TO THE PUBLIC AS A FIRST MORTGAGE
2 LENDER.
3 (14) NONPROFIT CORPORATIONS MAKING MORTGAGE LOANS TO
4 PROMOTE HOME OWNERSHIP OR IMPROVEMENTS FOR THE DISADVANTAGED,
5 GIVEN THAT THE CORPORATION DOES NOT HOLD ITSELF OUT TO THE
6 PUBLIC AS A FIRST MORTGAGE LENDER.
7 (15) A NONPROFIT CORPORATION MAKING NOT MORE THAN 12
8 MORTGAGE LOANS A CALENDAR YEAR WITH ITS OWN FUNDS, THAT SHALL
9 NOT INCLUDE FUNDS BORROWED THROUGH WAREHOUSE LINES OF CREDIT
10 OR OTHER SOURCES FOR THE PURPOSE OF MAKING MORTGAGE LOANS,
11 WHICH LOANS ARE RETAINED IN THE CORPORATION'S OWN PORTFOLIOS
12 AND NOT REGULARLY SOLD TO OTHERS AND ARE MADE TO PROMOTE AND
13 ADVANCE THE CULTURAL TRADITIONS AND LIFESTYLES OF BONA FIDE
14 RELIGIOUS ORGANIZATIONS PROVIDED THAT THE CORPORATION DOES
15 NOT HOLD ITSELF OUT TO THE PUBLIC AS A FIRST MORTGAGE LENDER.
16 (C) LOANS FOR BUSINESS OR COMMERCIAL PURPOSES.--THIS [ACT]
17 CHAPTER SHALL NOT APPLY TO MORTGAGE LOANS MADE FOR BUSINESS OR
18 COMMERCIAL PURPOSES. THAT THE CORPORATION DOES NOT HOLD ITSELF <--
19 OUT TO THE PUBLIC AS A FIRST MORTGAGE LENDER.
20 (C) LOANS FOR BUSINESS OR COMMERCIAL PURPOSES.--THIS ACT
21 SHALL NOT APPLY TO MORTGAGE LOANS MADE FOR BUSINESS OR
22 COMMERCIAL PURPOSES.
23 SECTION [4] 304. APPLICATION FOR LICENSE.
24 (A) CONTENTS.--AN APPLICATION FOR A LICENSE TO ACT AS A
25 MORTGAGE BANKER, LOAN CORRESPONDENT, MORTGAGE BROKER OR LIMITED
26 MORTGAGE BROKER SHALL BE ON SUCH FORMS AS MAY BE PRESCRIBED AND
27 PROVIDED BY THE DEPARTMENT. EACH APPLICATION SHALL INCLUDE THE
28 ADDRESS OR ADDRESSES WHERE BUSINESS IS TO BE CONDUCTED, THE FULL
29 NAME, OFFICIAL TITLE AND BUSINESS ADDRESS OF EACH DIRECTOR AND
30 PRINCIPAL OFFICER OF THE BUSINESS AND ANY OTHER INFORMATION THAT
20010S0377B1240 - 18 -
1 MAY BE REQUIRED BY THE DEPARTMENT. AN APPLICANT SHALL
2 DEMONSTRATE TO THE DEPARTMENT THAT POLICIES AND PROCEDURES HAVE
3 BEEN DEVELOPED TO RECEIVE AND PROCESS CUSTOMER INQUIRIES AND
4 GRIEVANCES PROMPTLY AND FAIRLY.
5 (B) MORTGAGE BANKER'S LICENSE.--THE DEPARTMENT SHALL ISSUE A
6 MORTGAGE BANKER'S LICENSE APPLIED FOR PURSUANT TO THIS [ACT]
7 CHAPTER IF THE APPLICANT ESTABLISHES THAT HE HAS MET THE
8 FOLLOWING CONDITIONS:
9 (1) THAT HE IS APPROVED BY OR MEETS THE CURRENT CRITERIA
10 FOR APPROVAL OF AT LEAST ONE OF THE FOLLOWING:
11 (I) FEDERAL NATIONAL MORTGAGE ASSOCIATION.
12 (II) FEDERAL HOME LOAN MORTGAGE CORPORATION.
13 (III) FEDERAL HOUSING ADMINISTRATION.
14 (2) THAT HE MAINTAINS OR IS APPROVED FOR, AND WILL
15 CONTINUE TO MAINTAIN AS A LICENSEE, A LINE OF CREDIT OR
16 EQUIVALENT MORTGAGE-FUNDING CAPABILITY OF NOT LESS THAN
17 $1,000,000.
18 (3) THAT HE HAS A MINIMUM TANGIBLE NET WORTH OF $250,000
19 AT THE TIME OF APPLICATION AND WILL, AT ALL TIMES THEREAFTER,
20 MAINTAIN SUCH MINIMUM NET WORTH, PROVIDED, HOWEVER, THAT
21 THOSE APPLICANTS WHO WERE IN BUSINESS PRIOR TO JUNE 20, 1990,
22 MAY BE LICENSED WITH A MINIMUM TANGIBLE NET WORTH OF $100,000
23 IF, IN THE OPINION OF THE DEPARTMENT, THE APPLICANT HAS
24 ESTABLISHED THAT IT HAS AN OTHERWISE ADEQUATE FINANCIAL
25 STRUCTURE AND OPERATING HISTORY.
26 (4) THAT HE WILL MAINTAIN FIDELITY BOND COVERAGE IN
27 ACCORDANCE WITH THE GUIDELINES ESTABLISHED BY THE FEDERAL
28 NATIONAL MORTGAGE ASSOCIATION OR THE FEDERAL HOME LOAN
29 MORTGAGE CORPORATION.
30 (B.1) LOAN CORRESPONDENT'S LICENSE.--
20010S0377B1240 - 19 -
1 (1) THE DEPARTMENT SHALL ISSUE A LOAN CORRESPONDENT'S
2 LICENSE APPLIED FOR PURSUANT TO THIS [ACT] CHAPTER IF THE
3 APPLICANT ESTABLISHES THAT HE HAS MET THE FOLLOWING
4 CONDITIONS:
5 (I) THAT HE IS ELIGIBLE TO AND WILL OBTAIN AND
6 MAINTAIN A BOND IN THE AMOUNT OF $100,000, IN A FORM
7 ACCEPTABLE TO THE DEPARTMENT, PRIOR TO THE ISSUANCE OF
8 THE LICENSE, FROM A SURETY COMPANY AUTHORIZED TO DO
9 BUSINESS IN THIS COMMONWEALTH. THE BOND SHALL RUN TO THE
10 COMMONWEALTH OF PENNSYLVANIA AND SHALL BE FOR THE USE OF
11 THE COMMONWEALTH AND ANY PERSON OR PERSONS WHO OBTAIN A
12 JUDGMENT AGAINST THE LOAN CORRESPONDENT FOR FAILURE TO
13 CARRY OUT THE TERMS OF ANY PROVISION FOR WHICH ADVANCE
14 FEES ARE PAID. NO BOND SHALL COMPLY WITH THE REQUIREMENTS
15 OF THIS SECTION UNLESS IT CONTAINS A PROVISION THAT IT
16 SHALL NOT BE CANCELED FOR ANY CAUSE UNLESS NOTICE OF
17 INTENTION TO CANCEL IS GIVEN TO THE DEPARTMENT AT LEAST
18 30 DAYS BEFORE THE DAY UPON WHICH CANCELLATION SHALL TAKE
19 EFFECT.
20 (II) THAT HE HAS A MINIMUM TANGIBLE NET WORTH OF
21 $100,000 AT THE TIME OF APPLICATION AND WILL, AT ALL
22 TIMES THEREAFTER, MAINTAIN SUCH MINIMUM NET WORTH.
23 (III) NOTWITHSTANDING SUBPARAGRAPH (II), AN
24 APPLICANT WHO WAS IN THE BUSINESS AS A MORTGAGE BANKER,
25 MORTGAGE BROKER OR OTHERWISE AUTHORIZED TO ENGAGE IN THE
26 FIRST MORTGAGE LOAN BUSINESS BY THE DEPARTMENT PRIOR TO
27 THE EFFECTIVE DATE OF THIS SECTION WHO FILES AN
28 APPLICATION WITHIN 90 DAYS AFTER THE EFFECTIVE DATE OF
29 THIS SECTION MAY BE LICENSED FOR ONE YEAR WITH A MINIMUM
30 TANGIBLE NET WORTH OF $50,000. THEREAFTER, FOR A PERIOD
20010S0377B1240 - 20 -
1 OF ONE YEAR, THE APPLICANT MAY CONTINUE TO BE LICENSED
2 WITH A MINIMUM TANGIBLE NET WORTH OF $75,000. FOLLOWING
3 THAT PERIOD, THE APPLICANT MAY CONTINUE TO BE LICENSED
4 WITH A MINIMUM TANGIBLE NET WORTH OF $100,000.
5 (C) MORTGAGE BROKER'S LICENSE.--
6 (1) THE DEPARTMENT SHALL ISSUE A MORTGAGE BROKER'S
7 LICENSE APPLIED FOR PURSUANT TO THIS [ACT] CHAPTER IF THE
8 APPLICANT ESTABLISHES THAT HE IS ELIGIBLE TO AND WILL OBTAIN
9 AND MAINTAIN A BOND IN THE AMOUNT OF $100,000, IN A FORM
10 ACCEPTABLE TO THE DEPARTMENT, PRIOR TO THE ISSUANCE OF THE
11 LICENSE, FROM A SURETY COMPANY AUTHORIZED TO DO BUSINESS IN
12 THIS COMMONWEALTH. THE BOND SHALL BE A PENAL BOND CONDITIONED
13 ON COMPLIANCE WITH THIS CHAPTER AND SUBJECT TO FORFEITURE BY
14 THE DEPARTMENT AND SHALL RUN TO THE COMMONWEALTH OF
15 PENNSYLVANIA [AND SHALL BE FOR THE USE OF THE COMMONWEALTH
16 AND] FOR ITS USE. THE BOND SHALL ALSO BE FOR THE USE OF ANY
17 PERSON [OR PERSONS] AGAINST THE MORTGAGE BROKER FOR FAILURE
18 TO CARRY OUT THE TERMS OF ANY PROVISION FOR WHICH ADVANCE
19 FEES ARE PAID. IF SUCH PERSON [OR PERSONS SHALL BE SO] IS
20 AGGRIEVED, HE MAY [UPON RECOVERING JUDGMENT AGAINST SUCH
21 LICENSEE ISSUE EXECUTION UNDER SUCH JUDGMENT AND MAINTAIN AN
22 ACTION UPON THE BOND OF THE LICENSEE IN ANY COURT HAVING
23 JURISDICTION FOR THE AMOUNT CLAIMED PLUS COSTS, PROVIDED THE
24 DEPARTMENT ASSENTS THERETO.] WITH THE WRITTEN ASSENT OF THE
25 DEPARTMENT, RECOVER ADVANCE FEES AND COSTS FROM THE BOND BY
26 FILING A CLAIM WITH THE SURETY COMPANY OR MAINTAINING AN
27 ACTION ON THE BOND. IN THE ALTERNATIVE, AN AGGRIEVED PERSON
28 MAY RECOVER ADVANCE FEES AND COSTS BY FILING A FORMAL
29 COMPLAINT AGAINST THE MORTGAGE BROKER WITH THE DEPARTMENT
30 WHICH SHALL ADJUDICATE THE MATTER. SUCH AN ADJUDICATION SHALL
20010S0377B1240 - 21 -
1 BE BINDING UPON THE SURETY COMPANY AND ENFORCEABLE BY THE
2 DEPARTMENT IN COMMONWEALTH COURT AND BY AN AGGRIEVED PERSON
3 IN ANY COURT. ANY AGGRIEVED PERSON SEEKING TO RECOVER ADVANCE
4 FEES AND COSTS FROM A BOND THAT HAS ALREADY BEEN FORFEITED BY
5 THE DEPARTMENT OR WHICH THE DEPARTMENT IS IN THE PROCESS OF
6 FORFEITING MAY RECOVER PAYMENT ON SUCH BOND IF, AFTER FILING
7 A PETITION WITH THE DEPARTMENT, THE DEPARTMENT ASSENTS TO HIS
8 REQUESTED PAYMENT OR PORTION THEREOF. THE DEPARTMENT MAY PAY
9 THE AGGRIEVED PERSON FROM THE BOND PROCEEDS IT RECOVERED IN
10 SUCH CASE. NOTHING IN THIS SECTION SHALL BE CONSTRUED AS
11 LIMITING THE ABILITY OF ANY COURT OR DISTRICT JUSTICE TO
12 AWARD TO ANY AGGRIEVED PERSON OTHER DAMAGES, COURT COSTS AND
13 ATTORNEY FEES AS PERMITTED BY LAW, BUT THOSE CLAIMS THAT ARE
14 NOT ADVANCE FEES OR RELATED COSTS MAY NOT BE RECOVERED FROM
15 THE BOND. THE DEPARTMENT, IN ITS DISCRETION, MAY ASSENT TO OR
16 ORDER PRO RATA OR OTHER RECOVERY ON THE BOND FOR ANY
17 AGGRIEVED PERSON IF CLAIMS AGAINST THE BOND MAY OR DO EXCEED
18 ITS FULL MONETARY AMOUNT. NO BOND SHALL COMPLY WITH THE
19 REQUIREMENTS OF THIS SECTION UNLESS IT CONTAINS A PROVISION
20 THAT IT SHALL NOT BE CANCELED FOR ANY CAUSE UNLESS NOTICE OF
21 INTENTION TO CANCEL IS GIVEN TO THE DEPARTMENT AT LEAST 30
22 DAYS BEFORE THE DAY UPON WHICH CANCELLATION SHALL TAKE
23 EFFECT. CANCELLATION OF THE BOND SHALL NOT INVALIDATE THE
24 BOND REGARDING THE PERIOD OF TIME IT WAS IN EFFECT.
25 (2) MORTGAGE BROKERS WHO CAN DEMONSTRATE TO THE
26 SATISFACTION OF THE DEPARTMENT THAT THEY DO NOT ACCEPT
27 ADVANCE FEES SHALL BE EXEMPT FROM THE BOND REQUIREMENT OF
28 THIS SUBSECTION.
29 (C.1) LIMITED MORTGAGE BROKER'S LICENSE.--THE DEPARTMENT
30 SHALL ISSUE A LIMITED MORTGAGE BROKER'S LICENSE APPLIED FOR
20010S0377B1240 - 22 -
1 PURSUANT TO THIS [ACT] CHAPTER IF THE APPLICANT ESTABLISHES THAT
2 HE IS AN INDIVIDUAL WHO OPERATES FROM ONE LOCATION AND MAINTAINS
3 NO BRANCH OFFICES AND CAN DEMONSTRATE TO THE SATISFACTION OF THE
4 DEPARTMENT THAT HE ACCEPTS OR COLLECTS NO ADVANCE FEES.
5 (D) FOREIGN CORPORATION.--IF THE APPLICANT IS A FOREIGN
6 CORPORATION, THAT CORPORATION SHALL BE AUTHORIZED TO DO BUSINESS
7 IN THIS COMMONWEALTH IN ACCORDANCE WITH THE LAW OF THIS
8 COMMONWEALTH REGULATING CORPORATIONS AND SHALL MAINTAIN AT LEAST
9 ONE OFFICE IN THIS COMMONWEALTH WHICH IS THE OFFICE THAT SHALL
10 BE LICENSED AS THE PRINCIPAL PLACE OF BUSINESS FOR THE PURPOSES
11 OF THIS [ACT] CHAPTER. A FOREIGN CORPORATION WHICH WILL ACT ONLY
12 IN THE CAPACITY OF A WHOLESALE TABLE FUNDER SHALL BE EXEMPT FROM
13 THE REQUIREMENT THAT IT MAINTAIN AT LEAST ONE OFFICE IN THIS
14 COMMONWEALTH. THE CORPORATION SHALL FILE WITH THE APPLICATION AN
15 IRREVOCABLE CONSENT, DULY ACKNOWLEDGED, THAT SUITS AND ACTIONS
16 MAY BE COMMENCED AGAINST THAT LICENSEE IN THE COURTS OF THIS
17 COMMONWEALTH BY THE SERVICE OF PROCESS OF ANY PLEADING UPON THE
18 DEPARTMENT IN THE USUAL MANNER PROVIDED FOR SERVICE OF PROCESS
19 AND PLEADINGS BY THE STATUTES AND COURT RULES OF THIS
20 COMMONWEALTH. THE CONSENT SHALL PROVIDE THAT THIS SERVICE SHALL
21 BE AS VALID AND BINDING AS IF SERVICE HAD BEEN MADE PERSONALLY
22 UPON THE LICENSEE IN THIS COMMONWEALTH. IN ALL CASES WHERE
23 PROCESS OR PLEADINGS ARE SERVED UPON THE DEPARTMENT PURSUANT TO
24 THE PROVISIONS OF THIS SECTION, SUCH PROCESS OR PLEADINGS SHALL
25 BE SERVED IN TRIPLICATE; ONE COPY SHALL BE FILED IN THE OFFICE
26 OF THE SECRETARY OF BANKING AND THE OTHERS SHALL BE FORWARDED BY
27 THE DEPARTMENT, BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
28 REQUESTED, TO THE LAST KNOWN PRINCIPAL PLACE OF BUSINESS IN THE
29 COMMONWEALTH AND TO THE CORPORATION'S PRINCIPAL PLACE OF
30 BUSINESS.
20010S0377B1240 - 23 -
1 (E) EDUCATION.--TO MAINTAIN A MORTGAGE BANKER'S, A LOAN
2 CORRESPONDENT'S OR A MORTGAGE BROKER'S LICENSE, THE APPLICANT OR
3 LICENSEE SHALL DEMONSTRATE TO THE SATISFACTION OF THE SECRETARY
4 THAT AT LEAST ONE [PERSON] INDIVIDUAL FROM EACH LICENSED OFFICE
5 HAS ATTENDED A MINIMUM OF SIX HOURS OF SUCH CONTINUING EDUCATION
6 EACH YEAR. TO MAINTAIN A LIMITED MORTGAGE BROKER'S LICENSE, THE
7 LICENSEE SHALL DEMONSTRATE TO THE SATISFACTION OF THE SECRETARY
8 THAT HE HAS ATTENDED AT LEAST TWO HOURS OF CONTINUING EDUCATION
9 EACH YEAR. THE SECRETARY SHALL DELINEATE THE REQUIREMENTS FOR
10 SUCH CONTINUING EDUCATION BY REGULATION WITHIN THREE YEARS OF
11 THE EFFECTIVE DATE OF THIS ACT. THE SECRETARY MAY REVIEW AND
12 APPROVE CONTINUING EDUCATION PROGRAMS AND PROVIDERS TO SATISFY
13 THE CONTINUING EDUCATION REQUIREMENT. THE SECRETARY MAY CHARGE
14 PROVIDERS OF CONTINUING EDUCATION PROGRAMS A FEE, TO BE
15 DETERMINED BY THE SECRETARY, FOR DEPARTMENT REVIEW OF CONTINUING
16 EDUCATION PROGRAMS AND PROVIDERS.
17 SECTION [5] 305. ANNUAL LICENSE FEE.
18 (A) GENERAL RULE.--A MORTGAGE BANKER, MORTGAGE BROKER OR
19 APPLICANT SHALL PAY TO THE DEPARTMENT AT THE TIME AN APPLICATION
20 IS FILED AN INITIAL LICENSE FEE FOR THE PRINCIPAL PLACE OF
21 BUSINESS AND AN ADDITIONAL LICENSE FEE FOR EACH BRANCH OFFICE AS
22 PROVIDED FOR IN SECTION 603-A OF THE ACT OF APRIL 9, 1929
23 (P.L.177, NO.175), KNOWN AS THE ADMINISTRATIVE CODE OF 1929. ON
24 OR BEFORE JULY 1 OF EACH YEAR AND THEREAFTER, A LICENSEE SHALL
25 PAY A LICENSE RENEWAL FEE FOR THE PRINCIPAL PLACE OF BUSINESS
26 AND AN ADDITIONAL LICENSE RENEWAL FEE FOR EACH BRANCH OFFICE AS
27 PROVIDED FOR IN SECTION 603-A OF THE ADMINISTRATIVE CODE OF
28 1929. AN APPLICANT FOR A LICENSE TO OPERATE AS A LOAN
29 CORRESPONDENT SHALL PAY THE DEPARTMENT THE SAME FEE FOR THE
30 INITIAL LICENSE FOR PRINCIPAL PLACE OF BUSINESS, EACH BRANCH
20010S0377B1240 - 24 -
1 OFFICE AND ANNUAL LICENSE RENEWAL AS PROVIDED FOR MORTGAGE
2 BANKERS LICENSED UNDER SECTION 603-A OF THE ADMINISTRATIVE CODE
3 OF 1929. AN APPLICANT FOR A LICENSE TO OPERATE AS A LIMITED
4 MORTGAGE BROKER SHALL PAY TO THE DEPARTMENT AT THE TIME AN
5 APPLICATION IS FILED AN INITIAL LICENSE FEE OF $250. ON OR
6 BEFORE JULY 1 OF EACH YEAR THEREAFTER, A LIMITED MORTGAGE BROKER
7 LICENSEE SHALL PAY A RENEWAL FEE OF $200.
8 (B) RECOVERY OF COSTS.--NO ABATEMENT OF ANY LICENSE FEE
9 SHALL BE MADE IF THE LICENSE IS ISSUED FOR A PERIOD OF LESS THAN
10 ONE YEAR. THE DEPARTMENT SHALL BE ENTITLED TO RECOVER ANY COST
11 OF INVESTIGATION IN EXCESS OF LICENSE OR RENEWAL FEES FROM THE
12 LICENSEE OR FROM ANY PERSON WHO IS NOT LICENSED UNDER THIS [ACT]
13 CHAPTER BUT WHO IS PRESUMED TO BE ENGAGED IN BUSINESS
14 CONTEMPLATED BY THIS [ACT] CHAPTER.
15 SECTION [6] 306. ISSUANCE OF LICENSE.
16 (A) TIME LIMIT.--WITHIN 60 DAYS AFTER A COMPLETE APPLICATION
17 IS RECEIVED, THE DEPARTMENT SHALL EITHER ISSUE A LICENSE OR, FOR
18 ANY REASON FOR WHICH THE DEPARTMENT MAY SUSPEND, REVOKE OR
19 REFUSE TO RENEW A LICENSE AS PROVIDED FOR BY SECTION [13] 313,
20 REFUSE TO ISSUE A LICENSE. UPON RECEIPT OF AN APPLICATION FOR
21 LICENSE, THE DEPARTMENT SHALL CONDUCT SUCH INVESTIGATION AS IT
22 DEEMS NECESSARY TO DETERMINE THAT THE APPLICANT AND ITS
23 OFFICERS, DIRECTORS AND PRINCIPALS ARE OF GOOD CHARACTER AND
24 ETHICAL REPUTATION.
25 (B) APPEAL OF DENIAL.--IF THE DEPARTMENT REFUSES TO ISSUE A
26 LICENSE, IT SHALL NOTIFY THE APPLICANT, IN WRITING, OF THE
27 DENIAL AND THE REASON THEREFOR AND OF THE APPLICANT'S RIGHT TO
28 APPEAL FROM SUCH ACTION TO THE COMMONWEALTH COURT. AN APPEAL
29 FROM THE DEPARTMENT'S REFUSAL TO APPROVE AN APPLICATION FOR A
30 LICENSE SHALL BE FILED BY THE APPLICANT WITHIN 30 DAYS OF NOTICE
20010S0377B1240 - 25 -
1 THEREOF.
2 (C) CONTENTS OF LICENSE.--EACH LICENSE ISSUED BY THE
3 DEPARTMENT SHALL SPECIFY:
4 (1) THE NAME AND ADDRESS OF THE LICENSEE, THE ADDRESS SO
5 SPECIFIED TO BE THAT OF THE LICENSEE'S PRINCIPAL PLACE OF
6 BUSINESS WITHIN THIS COMMONWEALTH OR, FOR A LICENSEE ACTING
7 ONLY IN THE CAPACITY OF A WHOLESALE TABLE FUNDER, EITHER IN
8 OR OUTSIDE OF THIS COMMONWEALTH.
9 (2) THE LICENSEE'S REFERENCE NUMBER, WHICH MAY REMAIN
10 THE SAME FROM YEAR TO YEAR DESPITE VARIATIONS IN ANNUAL
11 LICENSE NUMBERS WHICH MAY RESULT FROM THE RENEWAL OF LICENSES
12 BY MECHANICAL TECHNIQUES.
13 (3) SUCH OTHER INFORMATION AS THE DEPARTMENT SHALL
14 REQUIRE TO CARRY OUT THE PURPOSES OF THIS [ACT] CHAPTER.
15 (D) DENIAL OF LICENSE DUE TO CONVICTION.--THE DEPARTMENT MAY
16 DENY A LICENSE IF IT FINDS THAT THE APPLICANT OR ANY PERSON WHO
17 IS A DIRECTOR, OFFICER, PARTNER, AGENT, EMPLOYEE OR ULTIMATE
18 EQUITABLE OWNER OF 10% OR MORE OF THE APPLICANT HAS BEEN
19 CONVICTED OF A MISDEMEANOR OR FELONY IN ANY JURISDICTION OR OF A
20 CRIME WHICH, IF CONVICTED IN THIS COMMONWEALTH, WOULD CONSTITUTE
21 A MISDEMEANOR OR FELONY UNDER THE LAWS OF THIS COMMONWEALTH. FOR
22 THE PURPOSES OF THIS [ACT] CHAPTER, A PERSON SHALL BE DEEMED TO
23 HAVE BEEN CONVICTED OF A CRIME IF THE PERSON SHALL HAVE PLEADED
24 GUILTY OR NOLO CONTENDERE TO A CHARGE THEREOF BEFORE A COURT OR
25 FEDERAL MAGISTRATE OR SHALL HAVE BEEN FOUND GUILTY THEREOF BY
26 THE DECISION OR JUDGMENT OF A COURT OR FEDERAL MAGISTRATE OR BY
27 THE VERDICT OF A JURY, IRRESPECTIVE OF THE PRONOUNCEMENT OF
28 SENTENCE OR THE SUSPENSION THEREOF, UNLESS THE PLEAS OF GUILTY
29 OR NOLO CONTENDERE OR THE DECISION, JUDGMENT OR VERDICT SHALL
30 HAVE BEEN SET ASIDE, VACATED, REVERSED OR OTHERWISE ABROGATED BY
20010S0377B1240 - 26 -
1 LAWFUL JUDICIAL PROCESS.
2 (E) DENIAL OF LICENSE FOR OTHER REASON.--THE DEPARTMENT MAY
3 DENY A LICENSE OR OTHERWISE RESTRICT A LICENSE IF IT FINDS THAT,
4 WITHIN TWO YEARS PRIOR TO OR FROM THE DATE OF THE APPLICATION,
5 THE APPLICANT OR ANY PERSON WHO IS A DIRECTOR, OFFICER, PARTNER,
6 AGENT, EMPLOYEE OR ULTIMATE EQUITABLE OWNER OF 10% OR MORE OF
7 THE APPLICANT:
8 (1) HAS HAD A LICENSE APPLICATION OR LICENSE ISSUED BY
9 THE DEPARTMENT DENIED, SUSPENDED OR REVOKED;
10 (2) IS THE SUBJECT OF AN ORDER OF THE DEPARTMENT
11 DENYING, SUSPENDING OR REVOKING A LICENSE AS A MORTGAGE
12 BANKER, LOAN CORRESPONDENT, MORTGAGE BROKER OR LIMITED
13 MORTGAGE BROKER; OR
14 (3) HAS VIOLATED OR FAILED TO COMPLY WITH ANY PROVISION
15 OF THIS [ACT] CHAPTER OR ANY RULE OR ORDER OF THE DEPARTMENT.
16 SECTION [7] 307. LICENSE DURATION.
17 A LICENSE ISSUED BY THE DEPARTMENT SHALL:
18 (1) BE RENEWED ON JULY 1 OF EACH YEAR UPON PAYMENT OF
19 THE ANNUAL RENEWAL FEE AND AFTER A DETERMINATION THAT THE
20 LICENSEE IS CONDUCTING BUSINESS IN ACCORDANCE WITH THE
21 PROVISIONS OF THIS [ACT] CHAPTER IS MADE BY THE DEPARTMENT.
22 NO REFUND OF ANY PORTION OF THE LICENSE FEE SHALL BE MADE IF
23 THE LICENSE IS VOLUNTARILY SURRENDERED TO THE DEPARTMENT OR
24 SUSPENDED OR REVOKED BY THE DEPARTMENT PRIOR TO ITS
25 EXPIRATION DATE.
26 (2) BE INVALID IF THE MORTGAGE BANKER'S CORPORATE
27 CHARTER IS VOIDED IN ACCORDANCE WITH THE PROVISIONS OF ANY
28 LAW OF THIS COMMONWEALTH OR ANY OTHER STATE.
29 (3) NOT BE ASSIGNABLE OR TRANSFERABLE BY OPERATION OF
30 LAW OR OTHERWISE WITHOUT THE WRITTEN CONSENT OF THE
20010S0377B1240 - 27 -
1 DEPARTMENT.
2 SECTION [8] 308. LICENSEE REQUIREMENTS.
3 (A) REQUIREMENTS ON LICENSEE.--A LICENSEE SHALL:
4 (1) CONSPICUOUSLY DISPLAY ITS LICENSE AT EACH LICENSED
5 PLACE OF BUSINESS.
6 (2) MAINTAIN, AT ITS PRINCIPAL PLACE OF BUSINESS WITHIN
7 THIS COMMONWEALTH, OR AT SUCH PLACE WITHIN OR OUTSIDE THIS
8 COMMONWEALTH IF AGREED TO BY THE SECRETARY OF BANKING OR THE
9 COMMISSION, EITHER THE ORIGINAL OR A COPY OF SUCH BOOKS,
10 ACCOUNTS, RECORDS AND DOCUMENTS, OR ELECTRONIC OR OTHER
11 SIMILAR ACCESS THERETO, OF THE BUSINESS CONDUCTED UNDER THE
12 LICENSE AS MAY BE PRESCRIBED BY THE DEPARTMENT OR COMMISSION
13 TO ENABLE THEM TO DETERMINE WHETHER THE BUSINESS OF THE
14 LICENSEE IS BEING CONDUCTED IN ACCORDANCE WITH THE PROVISIONS
15 OF THIS [ACT] CHAPTER AND THE ORDERS, RULES AND REGULATIONS
16 ISSUED UNDER THIS [ACT] CHAPTER. THE DEPARTMENT, AT ITS
17 DETERMINATION, SHALL HAVE FREE ACCESS TO AND AUTHORIZATION TO
18 EXAMINE RECORDS MAINTAINED OUTSIDE OF THIS COMMONWEALTH. THE
19 COSTS OF THE EXAMINATION, INCLUDING TRAVEL COSTS, SHALL BE
20 BORNE BY THE LICENSEE. THE SECRETARY MAY DENY OR REVOKE THE
21 AUTHORITY TO MAINTAIN RECORDS OUTSIDE OF THIS COMMONWEALTH
22 FOR GOOD CAUSE IN THE INTEREST OF CONSUMER PROTECTION FOR
23 COMMONWEALTH BORROWERS.
24 (3) ANNUALLY, BEFORE MAY 1, FILE A REPORT WITH THE
25 DEPARTMENT OR COMMISSION WHICH SHALL SET FORTH SUCH
26 INFORMATION AS THE DEPARTMENT OR COMMISSION SHALL REQUIRE
27 CONCERNING THE BUSINESS CONDUCTED AS A LICENSEE DURING THE
28 PRECEDING CALENDAR YEAR. THE REPORT SHALL BE IN WRITING,
29 UNDER OATH, AND ON A FORM PROVIDED BY THE DEPARTMENT.
30 (4) BE SUBJECT TO EXAMINATION BY THE DEPARTMENT OR
20010S0377B1240 - 28 -
1 COMMISSION AT THE DISCRETION OF THE DEPARTMENT OR COMMISSION
2 AT WHICH TIME THE DEPARTMENT OR COMMISSION SHALL HAVE FREE
3 ACCESS, DURING REGULAR BUSINESS HOURS, TO THE LICENSEE'S
4 PLACE OR PLACES OF BUSINESS IN THIS COMMONWEALTH AND TO ALL
5 INSTRUMENTS, DOCUMENTS, ACCOUNTS, BOOKS AND RECORDS WHICH
6 PERTAIN TO A LICENSEE'S MORTGAGE LOAN BUSINESS, WHETHER
7 MAINTAINED IN OR OUTSIDE OF THIS COMMONWEALTH. THE DEPARTMENT
8 OR COMMISSION MAY EXAMINE A LICENSEE AT ANY TIME IF THE
9 DEPARTMENT OR COMMISSION DEEMS SUCH EXAMINATION TO BE
10 NECESSARY OR DESIRABLE. THE COST OF ANY SUCH EXAMINATION
11 SHALL BE BORNE BY THE LICENSEE.
12 (5) COMPLY WITH ALL PROVISIONS OF THE ACT OF JANUARY 30,
13 1974 (P.L.13, NO.6), REFERRED TO AS THE LOAN INTEREST AND
14 PROTECTION LAW, PROVIDED, HOWEVER, THAT THIS SHALL NOT BE
15 DEEMED AN OVERRIDE OF SECTION 501 OF THE DEPOSITORY
16 INSTITUTIONS DEREGULATION AND MONETARY CONTROL ACT OF 1980
17 (94 STAT. 161, 12 U.S.C. § [1735F-7 NOTE] 1735F-7A).
18 (6) COMPLY WITH THE PROVISIONS OF THE ACT OF DECEMBER
19 23, 1983 (P.L.385, NO.91), ENTITLED "AN ACT AMENDING THE ACT
20 OF DECEMBER 3, 1959 (P.L.1688, NO.621), ENTITLED, AS AMENDED,
21 'AN ACT TO PROMOTE THE HEALTH, SAFETY AND WELFARE OF THE
22 PEOPLE OF THE COMMONWEALTH BY BROADENING THE MARKET FOR
23 HOUSING FOR PERSONS AND FAMILIES OF LOW AND MODERATE INCOME
24 AND ALLEVIATING SHORTAGES THEREOF, AND BY ASSISTING IN THE
25 PROVISION OF HOUSING FOR ELDERLY PERSONS THROUGH THE CREATION
26 OF THE PENNSYLVANIA HOUSING FINANCE AGENCY AS A PUBLIC
27 CORPORATION AND GOVERNMENT INSTRUMENTALITY; PROVIDING FOR THE
28 ORGANIZATION, MEMBERSHIP AND ADMINISTRATION OF THE AGENCY,
29 PRESCRIBING ITS GENERAL POWERS AND DUTIES AND THE MANNER IN
30 WHICH ITS FUNDS ARE KEPT AND AUDITED, EMPOWERING THE AGENCY
20010S0377B1240 - 29 -
1 TO MAKE HOUSING LOANS TO QUALIFIED MORTGAGORS UPON THE
2 SECURITY OF INSURED AND UNINSURED MORTGAGES, DEFINING
3 QUALIFIED MORTGAGORS AND PROVIDING FOR PRIORITIES AMONG
4 TENANTS IN CERTAIN INSTANCES, PRESCRIBING INTEREST RATES AND
5 OTHER TERMS OF HOUSING LOANS, PERMITTING THE AGENCY TO
6 ACQUIRE REAL OR PERSONAL PROPERTY, PERMITTING THE AGENCY TO
7 MAKE AGREEMENTS WITH FINANCIAL INSTITUTIONS AND FEDERAL
8 AGENCIES, PROVIDING FOR THE PURCHASE BY PERSONS OF LOW AND
9 MODERATE INCOME OF HOUSING UNITS, AND APPROVING THE SALE OF
10 HOUSING UNITS, PERMITTING THE AGENCY TO SELL HOUSING LOANS,
11 PROVIDING FOR THE PROMULGATION OF REGULATIONS AND FORMS BY
12 THE AGENCY, PRESCRIBING PENALTIES FOR FURNISHING FALSE
13 INFORMATION, EMPOWERING THE AGENCY TO BORROW MONEY UPON ITS
14 OWN CREDIT BY THE ISSUANCE AND SALE OF BONDS AND NOTES AND BY
15 GIVING SECURITY THEREFOR, PERMITTING THE REFUNDING,
16 REDEMPTION AND PURCHASE OF SUCH OBLIGATIONS BY THE AGENCY,
17 PRESCRIBING REMEDIES OF HOLDERS OF SUCH BONDS AND NOTES,
18 EXEMPTING BONDS AND NOTES OF THE AGENCY, THE INCOME
19 THEREFROM, AND THE INCOME AND REVENUES OF THE AGENCY FROM
20 TAXATION, EXCEPT TRANSFER, DEATH AND GIFT TAXES; MAKING SUCH
21 BONDS AND NOTES LEGAL INVESTMENTS FOR CERTAIN PURPOSES; AND
22 INDICATING HOW THE ACT SHALL BECOME EFFECTIVE,' PROVIDING FOR
23 HOMEOWNER'S EMERGENCY ASSISTANCE."
24 (7) PROVIDE FOR PERIODIC ACCOUNTING OF ANY ESCROW
25 ACCOUNTS HELD BY THE LICENSEE TO THE BORROWERS NOT LESS THAN
26 ANNUALLY, SHOWING THE AMOUNTS RECEIVED FROM THE BORROWER AND
27 THE AMOUNTS DISBURSED.
28 (8) REFUND ALL FEES, OTHER THAN THOSE FEES PAID BY THE
29 LICENSEE TO A THIRD PARTY, PAID BY AN APPLICANT BORROWER WHEN
30 A MORTGAGE LOAN IS NOT PRODUCED WITHIN THE TIME SPECIFIED BY
20010S0377B1240 - 30 -
1 THE MORTGAGE BANKER, LOAN CORRESPONDENT, MORTGAGE BROKER OR
2 LIMITED MORTGAGE BROKER AT THE RATE, TERM AND OVERALL COST
3 AGREED TO BY THE BORROWER, PROVIDED, HOWEVER, THAT THIS
4 PROVISION SHALL NOT APPLY WHEN THE FAILURE TO PRODUCE A LOAN
5 IS DUE SOLELY TO THE BORROWER'S NEGLIGENCE, HIS REFUSAL TO
6 ACCEPT AND CLOSE ON A LOAN COMMITMENT OR HIS REFUSAL OR
7 INABILITY TO PROVIDE INFORMATION NECESSARY FOR PROCESSING,
8 INCLUDING, BUT NOT LIMITED TO, EMPLOYMENT VERIFICATIONS AND
9 VERIFICATIONS OF DEPOSITS. THE LICENSEE SHALL DISCLOSE TO THE
10 BORROWER, IN WRITING, AT THE TIME OF A LOAN APPLICATION WHICH
11 FEES PAID OR TO BE PAID ARE NONREFUNDABLE.
12 (9) ENSURE THAT ALL LOCK-IN AGREEMENTS SHALL BE IN
13 WRITING AND SHALL CONTAIN AT LEAST THE FOLLOWING PROVISIONS:
14 (I) THE EXPIRATION DATE OF THE LOCK-IN, IF ANY.
15 (II) THE INTEREST RATE LOCKED IN, IF ANY.
16 (III) THE DISCOUNT POINTS LOCKED IN, IF ANY.
17 (IV) THE COMMITMENT FEE LOCKED IN, IF ANY.
18 (V) THE LOCK-IN FEE, IF ANY.
19 (10) INCLUDE IN ALL ADVERTISEMENTS LANGUAGE INDICATING
20 THAT THE LICENSEE IS LICENSED BY THE DEPARTMENT.
21 (11) ALLOW FOR THE EVIDENCE OF ANY INSURANCE REQUIRED IN
22 CONNECTION WITH A LOAN BY A POLICY OR BINDER OR A COPY OF
23 EITHER.
24 (B) ACCOUNTING RECORDS.--AFTER THE EFFECTIVE DATE OF THIS
25 ACT, THE LICENSEE'S ACCOUNTING RECORDS MUST BE CONSTRUCTED AND
26 MAINTAINED IN COMPLIANCE WITH GENERALLY ACCEPTED ACCOUNTING
27 PRINCIPLES IF THE LICENSEE IS A MORTGAGE BANKER OR IN SUCH
28 MANNER AS MAY BE PROVIDED BY REGULATION FOR ALL OTHER LICENSEES,
29 AND ALL OF THE AFOREMENTIONED INSTRUMENTS, DOCUMENTS, ACCOUNTS,
30 BOOKS AND RECORDS SHALL BE KEPT SEPARATE AND APART FROM THE
20010S0377B1240 - 31 -
1 RECORDS OF ANY OTHER BUSINESS CONDUCTED BY THE LICENSEE AND
2 SHALL BE PRESERVED AND KEPT AVAILABLE FOR INVESTIGATION OR
3 EXAMINATION BY THE DEPARTMENT OR COMMISSION FOR AT LEAST TWO
4 YEARS AFTER A MORTGAGE LOAN HAS BEEN PAID IN FULL. THE
5 PROVISIONS OF THIS SUBSECTION SHALL NOT APPLY TO ANY INSTRUMENT,
6 DOCUMENT, ACCOUNT, BOOK OR RECORD THAT IS ASSIGNED, SOLD OR
7 TRANSFERRED TO ANOTHER PERSON, NOR SHALL THE TWO-YEAR
8 REQUIREMENT APPLY TO AN INSTRUMENT OR DOCUMENT WHICH MUST BE
9 RETURNED TO A BORROWER AT THE TIME A MORTGAGE LOAN IS PAID IN
10 FULL.
11 (C) COPIES.--IF COPIES OF INSTRUMENTS, DOCUMENTS, ACCOUNTS,
12 BOOKS OR RECORDS ARE MAINTAINED UNDER SUBSECTION (A)(2), THEY
13 MAY BE PHOTOSTATIC, MICROFILM OR ELECTRONIC COPIES OR COPIES
14 PROVIDED IN SOME OTHER MANNER APPROVED BY THE SECRETARY OF
15 BANKING OR THE COMMISSION, AS LONG AS ACCESS TO INFORMATION
16 REQUIRED BY THE SECRETARY OR COMMISSION EXISTS ELECTRONICALLY AT
17 ALL TIMES WITHIN THIS COMMONWEALTH.
18 (D) LIMITED POWERS.--THE POWERS CONFERRED UPON THE
19 COMMISSION BY THIS SECTION, EXCLUDING SUBSECTION (A)(1), SHALL
20 ONLY BE EXERCISED BY THE COMMISSION IN RELATION TO PERSONS
21 LICENSED PURSUANT TO THE PROVISIONS OF THE ACT OF FEBRUARY 19,
22 1980 (P.L.15, NO.9), KNOWN AS THE REAL ESTATE LICENSING AND
23 REGISTRATION ACT, WHO ARE SUBJECT TO THIS SECTION UNDER SECTION
24 [3(B)(3)] 303(B)(3) AND THE EXERCISE OF SUCH POWER BY THE
25 COMMISSION IN RELATION TO SUCH PERSONS SHALL BE EXCLUSIVE.
26 SECTION [9] 309. LICENSEE LIMITATIONS.
27 (A) PROHIBITIONS.--A LICENSEE SHALL NOT:
28 (1) TRANSACT ANY BUSINESS SUBJECT TO THE PROVISIONS OF
29 THIS [ACT] CHAPTER UNDER ANY OTHER NAME EXCEPT THOSE
30 DESIGNATED IN ITS LICENSE. A LICENSEE THAT CHANGES ITS NAME
20010S0377B1240 - 32 -
1 OR PLACE OR PLACES OF BUSINESS SHALL IMMEDIATELY NOTIFY THE
2 DEPARTMENT, WHICH SHALL ISSUE A CERTIFICATE, IF APPROPRIATE,
3 TO THE LICENSEE WHICH SHALL SPECIFY THE LICENSEE'S NEW NAME
4 OR ADDRESS.
5 (2) CONDUCT ANY BUSINESS OTHER THAN ANY BUSINESS
6 REGULATED BY THE DEPARTMENT IN ANY PLACE OF BUSINESS LICENSED
7 PURSUANT TO THIS [ACT] CHAPTER WITHOUT AT LEAST 90 DAYS'
8 PRIOR WRITTEN NOTIFICATION TO THE DEPARTMENT.
9 (3) DISBURSE THE PROCEEDS OF A MORTGAGE LOAN IN ANY FORM
10 OTHER THAN CASH, ELECTRONIC FUND TRANSFER, CERTIFIED CHECK OR
11 CASHIER'S CHECK WHERE SUCH PROCEEDS ARE DISBURSED BY THE
12 LICENSEE TO A CLOSING AGENT. THIS PARAGRAPH SHALL NOT BE
13 CONSTRUED AS REQUIRING A LENDER TO UTILIZE A CLOSING AGENT
14 AND SHALL NOT APPLY TO DISBURSEMENTS BY CHECK DIRECTLY FROM
15 THE LICENSEE'S ACCOUNT PAYABLE TO THE BORROWER, BORROWER
16 DESIGNEES OR OTHER PARTIES DUE FUNDS FROM THE CLOSING.
17 (4) IN THE CASE OF A LOAN CORRESPONDENT, SERVICE
18 MORTGAGE LOANS.
19 (5) IN THE CASE OF A MORTGAGE BROKER OR LIMITED MORTGAGE
20 BROKER, COMMIT TO CLOSE OR CLOSE MORTGAGE LOANS IN ITS OWN
21 NAME, SERVICE MORTGAGE LOANS, ENTER INTO LOCK-IN AGREEMENTS
22 OR COLLECT LOCK-IN FEES, PROVIDED, HOWEVER, THAT A MORTGAGE
23 BROKER OR LIMITED MORTGAGE BROKER CAN PROVIDE A LENDER'S
24 LOCK-IN AGREEMENT TO A BORROWER ON BEHALF OF THAT LENDER AND
25 COLLECT LOCK-IN FEES ON THE LENDER'S BEHALF PAYABLE TO THAT
26 LENDER.
27 (B) AUTHORITY TO CLOSE LOANS IN ATTORNEYS' AND TITLE
28 INSURANCE COMPANIES OR AGENCIES' OFFICES.--NOTHING CONTAINED IN
29 THIS [ACT] CHAPTER SHALL PROHIBIT ANY LICENSEE OR PERSON EXEMPT
30 FROM LICENSURE HEREUNDER FROM CLOSING ANY LOANS MADE UNDER THE
20010S0377B1240 - 33 -
1 PROVISIONS OF THIS [ACT] CHAPTER IN THE OFFICES OF ATTORNEYS-AT-
2 LAW LICENSED BY AND LOCATED IN THIS COMMONWEALTH AND TITLE
3 INSURANCE COMPANIES OR AGENCIES LICENSED BY AND LOCATED IN THIS
4 COMMONWEALTH.
5 SECTION [10] 310. AUTHORITY OF DEPARTMENT OR COMMISSION.
6 (A) DEPARTMENT REGULATIONS.--EXCEPT AS PROVIDED IN
7 SUBSECTION (B), THE DEPARTMENT SHALL HAVE THE AUTHORITY TO ISSUE
8 RULES AND REGULATIONS AND ORDERS AS MAY BE NECESSARY FOR THE
9 PROPER CONDUCT OF THE BUSINESS OF A MORTGAGE BANKER, LOAN
10 CORRESPONDENT, A MORTGAGE BROKER OR LIMITED MORTGAGE BROKER AND
11 FOR THE ENFORCEMENT OF THIS [ACT] CHAPTER, INCLUDING, BUT NOT
12 LIMITED TO, CEASE AND DESIST ORDERS, NOTICES OF FINES AND SUCH
13 OTHER ORDERS AS THE DEPARTMENT IN ITS DISCRETION MAY ISSUE.
14 (B) JOINT REGULATIONS.--THE DEPARTMENT AND THE COMMISSION
15 SHALL HAVE THE AUTHORITY TO JOINTLY ISSUE RULES AND REGULATIONS
16 AS MAY BE NECESSARY TO CARRY OUT THE PURPOSES OF SECTIONS [8, 10
17 AND 14(B)] 308, 310 AND 314(B), EXCLUDING SECTION [8(A)(1)]
18 308(A)(1). INITIAL RULES AND REGULATIONS SHALL BE JOINTLY ISSUED
19 BY THE DEPARTMENT AND THE COMMISSION WITHIN 180 DAYS AFTER THE
20 EFFECTIVE DATE OF THIS SUBSECTION.
21 (C) POWERS.--THE DEPARTMENT AND THE COMMISSION SHALL HAVE
22 THE AUTHORITY TO:
23 (1) EXAMINE ANY INSTRUMENT, DOCUMENT, ACCOUNT, BOOK,
24 RECORD OR FILE OF A LICENSEE OR ANY OTHER PERSON, OR MAKE
25 SUCH OTHER INVESTIGATION AS MAY BE NECESSARY TO ADMINISTER
26 THE PROVISIONS OF THIS [ACT] CHAPTER.
27 (2) CONDUCT ADMINISTRATIVE HEARINGS ON ANY MATTER
28 PERTAINING TO THIS [ACT] CHAPTER, ISSUE SUBPOENAS TO COMPEL
29 THE ATTENDANCE OF WITNESSES AND THE PRODUCTION OF
30 INSTRUMENTS, DOCUMENTS, ACCOUNTS, BOOKS AND RECORDS AT ANY
20010S0377B1240 - 34 -
1 SUCH HEARING, WHICH MAY BE RETAINED BY THE DEPARTMENT OR
2 COMMISSION UNTIL THE COMPLETION OF ALL PROCEEDINGS IN
3 CONNECTION WITH WHICH THEY WERE PRODUCED, AND ADMINISTER
4 OATHS AND AFFIRMATIONS TO ANY PERSON WHOSE TESTIMONY IS
5 REQUIRED. IN THE EVENT A PERSON FAILS TO COMPLY WITH A
6 SUBPOENA ISSUED BY THE DEPARTMENT OR COMMISSION OR TO TESTIFY
7 ON ANY MATTER CONCERNING WHICH HE MAY BE LAWFULLY
8 INTERROGATED, ON APPLICATION BY THE DEPARTMENT OR COMMISSION,
9 THE COMMONWEALTH COURT MAY ISSUE AN ORDER REQUIRING THE
10 ATTENDANCE OF SUCH PERSON, THE PRODUCTION OF INSTRUMENTS,
11 DOCUMENTS, ACCOUNTS, BOOKS OR RECORDS OR THE GIVING OF
12 TESTIMONY.
13 (3) REQUEST AND RECEIVE ANY INFORMATION OR RECORDS OF
14 ANY KIND, INCLUDING A REPORT OF CRIMINAL HISTORY RECORD
15 INFORMATION, FROM ANY FEDERAL, STATE, LOCAL OR FOREIGN
16 GOVERNMENT ENTITY, REGARDING ANY APPLICANT FOR A LICENSE,
17 LICENSEE OR ANY PERSON RELATED IN ANY WAY TO THE BUSINESS OF
18 SUCH APPLICANT OR LICENSEE, AT A COST TO BE PAID BY THE
19 APPLICANT OR LICENSEE.
20 (D) LIMITED POWERS.--THE POWERS CONFERRED UPON THE
21 COMMISSION BY SUBSECTION (C) SHALL ONLY BE EXERCISED BY THE
22 COMMISSION IN RELATION TO PERSONS LICENSED PURSUANT TO THE
23 PROVISIONS OF THE ACT OF FEBRUARY 19, 1980 (P.L.15, NO.9), KNOWN
24 AS THE REAL ESTATE LICENSING AND REGISTRATION ACT, WHO ARE
25 SUBJECT TO SUBSECTION (C) UNDER SECTION [3(B)(3)] 303(B)(3) AND
26 THE EXERCISE OF SUCH POWER BY THE COMMISSION IN RELATION TO SUCH
27 PERSONS SHALL BE EXCLUSIVE. ACCOUNTS, BOOKS OR RECORDS OR THE
28 GIVING OF TESTIMONY.
29 SECTION [11] 311. FEES.
30 (A) CERTAIN FEES PROHIBITED.--NO REAL ESTATE BROKER OR
20010S0377B1240 - 35 -
1 SALESPERSON WHO HAS RECEIVED A FEE, COMMISSION OR OTHER VALUABLE
2 CONSIDERATION IN CONNECTION WITH THE SALE OR TRANSFER OF REAL
3 ESTATE SHALL BE PAID OR RECEIVE A FEE OR OTHER COMPENSATION,
4 DIRECTLY OR INDIRECTLY, FOR PROVIDING MORTGAGE BROKERING
5 SERVICES IN CONNECTION WITH THE ORIGINATION OF A MORTGAGE LOAN
6 RELATIVE TO SUCH SALE OR TRANSFER OF REAL ESTATE, BUT SUCH
7 BROKER OR SALESPERSON MAY RECEIVE A FEE IN CONNECTION WITH SUCH
8 MORTGAGE LOAN TRANSACTION WHICH SHALL NOT EXCEED AN AMOUNT AS
9 ESTABLISHED BY THE COMMISSION PURSUANT TO THIS SECTION.
10 (B) REGULATIONS.--THE COMMISSION SHALL, WITHIN 180 DAYS OF
11 THE EFFECTIVE DATE OF THIS SUBSECTION, PROMULGATE RULES AND
12 REGULATIONS ESTABLISHING THE MAXIMUM FEES WHICH A REAL ESTATE
13 BROKER OR SALESPERSON MAY CHARGE FOR SERVICES RENDERED IN
14 CONNECTION WITH MORTGAGE BROKERING SERVICES. SAID FEES SHALL:
15 (1) BE FOR ACTUAL SERVICES RENDERED IN CONNECTION WITH
16 THE ORIGINATION OF A MORTGAGE LOAN.
17 (2) BE EXPRESSED IN TERMS OF DOLLARS OR AS A PERCENTAGE
18 OF THE MORTGAGE LOAN BEING CREATED.
19 (C) FORMULATION PROCEDURE.--PRIOR TO THE PUBLICATION OF ANY
20 NOTICE OF PROPOSED RULEMAKING UNDER THIS SECTION, THE COMMISSION
21 SHALL HOLD PUBLIC HEARINGS TO AFFORD ANY INTERESTED PARTY,
22 INCLUDING THE DEPARTMENT, FULL OPPORTUNITY TO PRESENT TESTIMONY,
23 COMMENT THEREON AND MAKE RECOMMENDATIONS REGARDING THE
24 FORMULATION OF SUCH RULES AND REGULATIONS. THE DEPARTMENT SHALL
25 ALSO HAVE 30 DAYS FOLLOWING THE CLOSE OF THE HEARINGS TO SUBMIT
26 FURTHER COMMENTS AND RECOMMENDATIONS TO THE COMMISSION. THE
27 PROCEDURE CONTAINED IN THIS SECTION SHALL BE IN ADDITION TO THE
28 REQUIREMENTS CONTAINED IN THE ACT OF JUNE 25, 1982 (P.L.633,
29 NO.181), KNOWN AS THE REGULATORY REVIEW ACT, AND SHALL NOT
30 AFFECT ANY RIGHT THE DEPARTMENT MAY HAVE TO PARTICIPATE IN THE
20010S0377B1240 - 36 -
1 RULEMAKING PROCESS FOLLOWING THE COMMISSION'S PUBLICATION OF
2 PROPOSED RULES AND REGULATIONS AS PERMITTED BY THAT ACT. IN
3 ESTABLISHING THE MAXIMUM FEES ALLOWABLE, THE COMMISSION SHALL
4 CONSIDER THE NATURE OF THE SERVICES PERFORMED BY THE REAL ESTATE
5 BROKER OR SALESPERSON AND THE TIME REQUIRED FOR THE PERFORMANCE
6 THEREOF.
7 (D) LICENSING OPTION.--A REAL ESTATE BROKER OR SALESPERSON
8 WHO IS ALSO A BONA FIDE MORTGAGE BROKER, MORTGAGE BANKER OR LOAN
9 CORRESPONDENT WHO HOLDS HIMSELF OUT PUBLICLY AS SUCH SHALL HAVE
10 THE OPTION OF BEING LICENSED AND REGULATED BY THE DEPARTMENT, IN
11 WHICH CASE HE SHALL NOT BE SUBJECT TO THE FEE LIMITATIONS
12 PROVIDED FOR IN THIS SECTION OR THE RULES AND REGULATIONS
13 PROMULGATED BY THE COMMISSION HEREUNDER.
14 (E) DISCLOSURE.--NO REAL ESTATE BROKER OR SALESPERSON SHALL
15 RECEIVE A FEE, COMMISSION OR OTHER VALUABLE CONSIDERATION
16 PURSUANT TO THIS SECTION AND THE REGULATIONS PROMULGATED
17 HEREUNDER UNLESS HE MAKES THE FOLLOWING WRITTEN DISCLOSURE TO
18 THE BUYER IN AT LEAST TEN-POINT BOLDFACE CAPITAL LETTERS.
19 THE REAL ESTATE BROKER IN THIS TRANSACTION WHO HAS
20 OFFERED TO ASSIST ME IN OBTAINING A MORTGAGE LOAN HAS
21 ADVISED ME OF THE FOLLOWING:
22 (1) HE DOES NOT REPRESENT ANY PARTICULAR MORTGAGE
23 LENDER; OR THE NAME OF THE MORTGAGE LENDER HE REPRESENTS
24 IS.........................
25 (2) I AM NOT REQUIRED TO OBTAIN THE MORTGAGE FOR THE
26 PURCHASE OF THE REAL ESTATE FROM THE MORTGAGE BANKER WHOM
27 THE BROKER REPRESENTS.
28 (3) THE REAL ESTATE BROKER HAS A FIDUCIARY
29 OBLIGATION TO THE SELLER, FROM WHOM HE WILL RECEIVE A
30 COMMISSION.
20010S0377B1240 - 37 -
1 (4) SHOULD THE REAL ESTATE BROKER VIOLATE ANY OF THE
2 PROVISIONS OF THE REAL ESTATE LICENSING AND REGISTRATION
3 ACT OR THE MORTGAGE BANKERS AND BROKERS ACT I MAY FILE A
4 COMPLAINT WITH THE PENNSYLVANIA REAL ESTATE COMMISSION.
5 SECTION 4. SECTION 12 OF THE ACT IS AMENDED TO READ:
6 SECTION [12] 312. SURRENDER OF LICENSE.
7 UPON SATISFYING THE DEPARTMENT THAT ALL CREDITORS HAVE BEEN
8 PAID OR THAT OTHER ARRANGEMENTS SATISFACTORY TO THE CREDITORS
9 AND THE DEPARTMENT HAVE BEEN MADE, A LICENSEE SHALL SURRENDER
10 ITS LICENSE TO THE DEPARTMENT BY DELIVERING ITS LICENSE TO THE
11 DEPARTMENT WITH WRITTEN NOTICE THAT THE LICENSE IS BEING
12 VOLUNTARILY SURRENDERED, BUT SUCH AN ACTION BY A LICENSEE SHALL
13 NOT AFFECT THE LICENSEE'S CIVIL OR CRIMINAL LIABILITY FOR ACTS
14 COMMITTED.
15 SECTION 5. SECTIONS 13 AND 14 OF THE ACT, AMENDED DECEMBER
16 21, 1998 (P.L.987, NO.131), ARE AMENDED TO READ:
17 SECTION [13] 313. SUSPENSION, REVOCATION OR REFUSAL.
18 (A) DEPARTMENTAL ACTION.--THE DEPARTMENT MAY SUSPEND, REVOKE
19 OR REFUSE TO RENEW ANY LICENSE ISSUED PURSUANT TO THIS [ACT]
20 CHAPTER AFTER GIVING 30 DAYS' WRITTEN NOTICE FORWARDED TO THE
21 LICENSEE'S PRINCIPAL PLACE OF BUSINESS, BY REGISTERED OR
22 CERTIFIED MAIL, RETURN RECEIPT REQUESTED, STATING THE
23 CONTEMPLATED ACTION AND THE REASON THEREFOR, IF THE DEPARTMENT
24 SHALL FIND, AFTER THE LICENSEE HAS HAD AN OPPORTUNITY TO BE
25 HEARD, THAT THE LICENSEE HAS:
26 (1) MADE ANY MATERIAL MISSTATEMENT IN HIS APPLICATION.
27 (2) FAILED TO COMPLY WITH OR VIOLATED ANY PROVISION OF
28 THIS [ACT] CHAPTER OR ANY RULE, REGULATION OR ORDER
29 PROMULGATED BY THE DEPARTMENT PURSUANT TO THIS [ACT] CHAPTER.
30 (3) IF LICENSED UNDER SECTION [4(C)(3)] 304(C)(3),
20010S0377B1240 - 38 -
1 ACCEPTED AN ADVANCE FEE.
2 (4) BECOME INSOLVENT, MEANING THAT THE LIABILITIES OF
3 THE APPLICANT OR LICENSEE EXCEED THE ASSETS OF THE APPLICANT
4 OR LICENSEE OR THAT THE APPLICANT OR LICENSEE CANNOT MEET THE
5 OBLIGATIONS OF THE APPLICANT OR LICENSEE AS THEY MATURE, OR
6 IS IN SUCH FINANCIAL CONDITION THAT THE APPLICANT OR LICENSEE
7 CANNOT CONTINUE IN BUSINESS WITH SAFETY TO THE CUSTOMERS OF
8 THE APPLICANT OR LICENSEE.
9 (5) ENGAGED IN DISHONEST, FRAUDULENT OR ILLEGAL
10 PRACTICES OR CONDUCT IN ANY BUSINESS OR UNFAIR OR UNETHICAL
11 PRACTICES OR CONDUCT IN CONNECTION WITH THE MORTGAGE
12 BUSINESS.
13 (6) BEEN CONVICTED OF A MISDEMEANOR OR OF A FELONY.
14 (7) FILED AN APPLICATION FOR A LICENSE WHICH, AS OF THE
15 DATE THE LICENSE WAS ISSUED OR AS OF THE DATE OF AN ORDER
16 DENYING, SUSPENDING OR REVOKING A LICENSE, WAS INCOMPLETE IN
17 ANY MATERIAL RESPECT OR CONTAINED ANY STATEMENT THAT WAS, IN
18 LIGHT OF THE CIRCUMSTANCES UNDER WHICH IT WAS MADE, FALSE OR
19 MISLEADING WITH RESPECT TO ANY MATERIAL FACT.
20 (8) PERMANENTLY OR TEMPORARILY BEEN ENJOINED BY A COURT
21 OF COMPETENT JURISDICTION FROM ENGAGING IN OR CONTINUING ANY
22 CONDUCT OR PRACTICE INVOLVING ANY ASPECT OF THE MORTGAGE
23 BUSINESS.
24 (9) BECOME THE SUBJECT OF AN ORDER OF THE DEPARTMENT
25 DENYING, SUSPENDING OR REVOKING A LICENSE AS A MORTGAGE
26 BANKER, MORTGAGE BROKER, LIMITED MORTGAGE BROKER OR LOAN
27 CORRESPONDENT.
28 (10) BECOME THE SUBJECT OF A UNITED STATES POSTAL
29 SERVICE FRAUD ORDER THAT IS CURRENTLY EFFECTIVE AND WAS
30 ISSUED WITHIN THE LAST FIVE YEARS.
20010S0377B1240 - 39 -
1 (11) FAILED TO COMPLY WITH THE REQUIREMENTS OF THIS
2 [ACT] CHAPTER TO MAKE AND KEEP RECORDS PRESCRIBED BY RULE OR
3 ORDER OF THE DEPARTMENT, TO PRODUCE SUCH RECORDS REQUIRED BY
4 THE DEPARTMENT OR TO FILE ANY FINANCIAL REPORTS OR OTHER
5 INFORMATION THE DEPARTMENT BY RULE OR ORDER MAY REQUIRE.
6 (12) BECOME THE SUBJECT OF AN ORDER OF THE DEPARTMENT
7 DENYING, SUSPENDING OR REVOKING A LICENSE UNDER THE
8 PROVISIONS OF ANY OTHER LAW ADMINISTERED BY THE DEPARTMENT.
9 (13) FAILED TO COMPLY WITH A CEASE AND DESIST ORDER
10 ENTERED AFTER NOTICE AND OPPORTUNITY FOR HEARING AND ISSUED
11 BY THE DEPARTMENT WITHIN THE LAST FIVE YEARS.
12 (14) DEMONSTRATED NEGLIGENCE OR INCOMPETENCE IN
13 PERFORMING ANY ACT FOR WHICH THE LICENSEE IS REQUIRED TO HOLD
14 A LICENSE UNDER THIS [ACT] CHAPTER.
15 (15) IN THE CASE OF A LIMITED MORTGAGE BROKER,
16 NEGOTIATED OR PLACED, EITHER DIRECTLY OR INDIRECTLY, A
17 MORTGAGE LOAN OTHER THAN A NONPURCHASE MONEY MORTGAGE LOAN AS
18 DEFINED IN THIS [ACT] CHAPTER.
19 THE HEARING AND NOTICE PROVISIONS OF THIS SECTION SHALL NOT
20 APPLY IF THE LICENSEE'S CORPORATE CHARTER IS VOIDED IN
21 ACCORDANCE WITH THE PROVISIONS OF ANY LAW OF THIS OR ANY OTHER
22 STATE, IN WHICH EVENT THE DEPARTMENT MAY SUSPEND OR REVOKE THE
23 LICENSE.
24 (B) REINSTATEMENT.--THE DEPARTMENT MAY SUBSEQUENTLY
25 REINSTATE A LICENSE WHICH HAS BEEN SUSPENDED OR REVOKED OR RENEW
26 A LICENSE WHICH HAD PREVIOUSLY BEEN REFUSED FOR RENEWAL IF THE
27 CONDITION WHICH WARRANTED THE ORIGINAL ACTION HAS BEEN CORRECTED
28 AND THE DEPARTMENT HAS REASON TO BELIEVE THAT SUCH CONDITION IS
29 NOT LIKELY TO OCCUR AGAIN AND THE LICENSEE SATISFIES THE
30 REQUIREMENTS OF THIS [ACT] CHAPTER.
20010S0377B1240 - 40 -
1 SECTION [14] 314. PENALTIES.
2 (A) NONLICENSEES.--ANY PERSON WHO IS NOT LICENSED BY THE
3 DEPARTMENT OR IS NOT EXEMPTED FROM THE LICENSING REQUIREMENTS IN
4 ACCORDANCE WITH THE PROVISIONS OF THIS [ACT] CHAPTER AND WHO
5 ENGAGES IN THE BUSINESS OF A MORTGAGE BANKER, LOAN
6 CORRESPONDENT, MORTGAGE BROKER OR LIMITED MORTGAGE BROKER
7 COMMITS A FELONY OF THE THIRD DEGREE.
8 (B) NONLICENSEES SUBJECT TO THE PROVISIONS OF THIS [ACT]
9 CHAPTER.--ANY PERSON WHO IS SUBJECT TO THE PROVISIONS OF THIS
10 [ACT] CHAPTER, EVEN THOUGH NOT LICENSED HEREUNDER, OR ANY PERSON
11 WHO IS NOT LICENSED BY THE DEPARTMENT OR IS NOT EXEMPT FROM THE
12 LICENSING REQUIREMENTS, WHO VIOLATES ANY OF THE PROVISIONS TO
13 WHICH IT IS SUBJECT SHALL BE SUBJECT TO A FINE LEVIED BY THE
14 DEPARTMENT OR COMMISSION OF UP TO $2,000 FOR EACH OFFENSE. ANY
15 SUCH NONLICENSED PERSON WHO COMMITS THREE OR MORE OFFENSES MAY,
16 AT THE DISCRETION OF THE DEPARTMENT OR COMMISSION, BE PROHIBITED
17 FROM ENGAGING IN [THE BUSINESS OF A MORTGAGE BROKER OR MORTGAGE
18 BANKER] THE FIRST MORTGAGE LOAN BUSINESS UNLESS LICENSED UNDER
19 THIS [ACT] CHAPTER.
20 (C) VIOLATIONS BY LICENSEES.--ANY PERSON LICENSED UNDER THE
21 PROVISIONS OF THIS [ACT] CHAPTER OR ANY DIRECTOR, OFFICER,
22 EMPLOYEE OR AGENT OF A LICENSEE WHO SHALL VIOLATE THE PROVISIONS
23 OF THIS [ACT] CHAPTER OR SHALL DIRECT OR CONSENT TO SUCH
24 VIOLATIONS SHALL BE SUBJECT TO A FINE LEVIED BY THE DEPARTMENT
25 OF UP TO $2,000 FOR EACH OFFENSE.
26 (D) LIMITED POWERS.--THE POWERS CONFERRED UPON THE
27 COMMISSION BY SUBSECTION (B) SHALL ONLY BE EXERCISED BY THE
28 COMMISSION IN RELATION TO PERSONS LICENSED PURSUANT TO THE
29 PROVISIONS OF THE ACT OF FEBRUARY 19, 1980 (P.L.15, NO.9), KNOWN
30 AS THE REAL ESTATE LICENSING AND REGISTRATION ACT, WHO ARE
20010S0377B1240 - 41 -
1 SUBJECT TO SUBSECTION (B) UNDER SECTION [3(B)(3)] 303(B)(3) AND
2 THE EXERCISE OF SUCH POWER BY THE COMMISSION IN RELATION TO SUCH
3 PERSONS SHALL BE EXCLUSIVE.
4 SECTION 6. SECTIONS 16 AND 17 OF THE ACT ARE AMENDED TO
5 READ:
6 SECTION [16] 316. REFERRAL FEES.
7 NOTHING IN THIS [ACT] CHAPTER SHALL PERMIT A REAL ESTATE
8 BROKER OR SALESPERSON, WHO RECEIVES A FEE, COMMISSION OR OTHER
9 VALUABLE CONSIDERATION RELATING TO THE SALE OF RESIDENTIAL REAL
10 PROPERTY, TO BE PAID OR RECEIVE A FINDER'S FEE OR A REFERRAL FEE
11 FOR THE REFERRAL OF A MORTGAGE LOAN TO A LENDER IN CONNECTION
12 WITH THAT SALE, WHETHER OR NOT THE REAL ESTATE BROKER OR
13 SALESPERSON IS LICENSED AND REGULATED BY THE DEPARTMENT.
14 SECTION [17] 317. REAL ESTATE RECOVERY FUND.
15 ANY PERSON INJURED BY THE WRONGFUL ACT, DEFAULT OR
16 MISREPRESENTATION OF A PERSON ENGAGED IN THE ACTIVITIES OF A
17 MORTGAGE BROKER WHO IS EXEMPT FROM LICENSURE UNDER THIS [ACT]
18 CHAPTER BY VIRTUE OF BEING LICENSED PURSUANT TO THE ACT OF
19 FEBRUARY 19, 1980 (P.L.15, NO.9), KNOWN AS THE REAL ESTATE
20 LICENSING AND REGISTRATION ACT, SHALL BE ENTITLED TO SEEK
21 RECOVERY FROM THE REAL ESTATE RECOVERY FUND ESTABLISHED BY THE
22 REAL ESTATE LICENSING AND REGISTRATION ACT NOTWITHSTANDING THE
23 FACT THAT SUCH WRONGFUL ACT, DEFAULT OR MISREPRESENTATION
24 OCCURRED IN CONJUNCTION WITH MORTGAGE-BROKERING ACTIVITIES
25 SUBJECT, HOWEVER, TO ALL OTHER TERMS AND CONDITIONS OF THE REAL
26 ESTATE LICENSING AND REGISTRATION ACT REGARDING RECOVERY FROM
27 THAT FUND.
28 SECTION 7. SECTION 18 OF THE ACT, AMENDED DECEMBER 21, 1988
29 (P.L.987, NO.131), IS AMENDED TO READ:
30 SECTION [18] 318. [SCOPE OF ACT] APPLICABILITY.
20010S0377B1240 - 42 -
1 THE PROVISIONS OF THIS [ACT] CHAPTER SHALL APPLY TO:
2 (1) ANY MORTGAGE LOAN WHICH IS:
3 (I) NEGOTIATED, OFFERED OR OTHERWISE TRANSACTED
4 WITHIN THIS COMMONWEALTH, IN WHOLE OR IN PART, WHETHER BY
5 THE ULTIMATE LENDER OR ANY OTHER PERSON;
6 (II) MADE OR EXECUTED WITHIN THIS COMMONWEALTH; OR
7 (III) NOTWITHSTANDING THE PLACE OF EXECUTION,
8 SECURED BY REAL PROPERTY LOCATED IN THIS COMMONWEALTH.
9 (2) ANY PERSON WHO ENGAGES IN THE FIRST MORTGAGE LOAN
10 BUSINESS IN THIS COMMONWEALTH.
11 SECTION 8. THE ACT IS AMENDED BY ADDING A CHAPTER AND A
12 CHAPTER HEADING TO READ:
13 CHAPTER 5
14 CONSUMER EQUITY PROTECTION
15 SUBCHAPTER A
16 GENERAL PROVISIONS
17 SECTION 501. SCOPE.
18 THIS CHAPTER DEALS WITH CONSUMER EQUITY PROTECTION.
19 SECTION 502. LEGISLATIVE FINDINGS.
20 THE GENERAL ASSEMBLY FINDS AND DECLARES AS FOLLOWS:
21 (1) ALL CITIZENS ARE ENTITLED TO FAIR ACCESS TO CREDIT
22 AND THE ABILITY TO SHARE IN THE AMERICAN DREAM OF
23 HOMEOWNERSHIP, INCLUDING THOSE WHOSE FINANCIAL OR OTHER
24 PERSONAL CIRCUMSTANCES MAKE THEM VULNERABLE TO PREDATORY
25 LENDERS WHO COULD TAKE ADVANTAGE OF THEM BY MAKING OR
26 ARRANGING HIGH-COST LOANS THAT BORROWERS MAY NOT BE ABLE TO
27 REPAY AND BY REFINANCING MORTGAGE LOANS WITH ADDED FEES THAT
28 RESULT IN THE BORROWER'S EQUITY BEING STRIPPED.
29 (2) THE SUBPRIME LENDING MARKET PROVIDES LOANS TO MANY
30 BORROWERS WHO HAVE IMPAIRED CREDIT, AND THIS LENDING MARKET
20010S0377B1240 - 43 -
1 PERFORMS A SIGNIFICANT SERVICE TO CITIZENS OF THIS
2 COMMONWEALTH, PARTICULARLY THOSE IN DISTRESSED URBAN AREAS.
3 (3) LEGISLATION AFFECTING THE SUBPRIME MARKET SHOULD NOT
4 BE OVERLY BROAD AND SHOULD RESTRICT ONLY THOSE RELATIVELY FEW
5 LENDERS WHO ARE PURPOSEFULLY ENGAGED IN PATTERNS AND
6 PRACTICES OF UNFAIR TREATMENT TO VULNERABLE CONSUMERS
7 COMMONLY REFERRED TO AS PREDATORY LENDING.
8 (4) THE LEGITIMATE CONVENTIONAL AND SUBPRIME MARKETS
9 SHOULD NOT BE SUBJECT TO THE SAME RESTRICTIONS, PROHIBITIONS,
10 REMEDIES AND PENALTIES AS THE HIGH-COST LOANS WHICH MEET
11 THRESHOLDS THAT DISTINGUISH THEM FROM LOANS IN OTHER MARKETS.
12 SECTION 503. DEFINITIONS.
13 THE FOLLOWING WORDS AND PHRASES WHEN USED IN THIS CHAPTER
14 SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS SECTION UNLESS THE
15 CONTEXT CLEARLY INDICATES OTHERWISE:
16 "AFFILIATE." ANY ENTITY THAT CONTROLS, IS CONTROLLED BY OR
17 IS UNDER COMMON CONTROL WITH ANOTHER ENTITY, AS DETERMINED UNDER
18 THE BANK HOLDING COMPANY ACT OF 1956 (70 STAT. 133, 12 U.S.C. §
19 1841 ET SEQ.).
20 "BRIDGE LOAN." A LOAN WITH A MATURITY OF LESS THAN 18 MONTHS
21 WHICH ONLY REQUIRES PAYMENTS OF INTEREST UNTIL SUCH TIME AS THE
22 ENTIRE UNPAID BALANCE IS DUE AND PAYABLE.
23 "COVERED LOAN." A CONSUMER CREDIT MORTGAGE LOAN TRANSACTION
24 INVOLVING PROPERTY LOCATED WITHIN THIS COMMONWEALTH, THAT IS
25 CONSIDERED A MORTGAGE UNDER SECTION 103(AA) OF THE TRUTH IN
26 LENDING ACT (PUBLIC LAW 90-321, 15 U.S.C. § 1602(AA)), AND
27 REGULATIONS ADOPTED PURSUANT THERETO BY THE FEDERAL RESERVE
28 BOARD, INCLUDING 12 CFR § 226.32 (RELATING TO REQUIREMENTS FOR
29 CERTAIN CLOSED-END HOME MORTGAGES), FOR WHICH THE ORIGINAL
30 PRINCIPAL BALANCE OF THE LOAN IS LESS THAN $100,000.
20010S0377B1240 - 44 -
1 "CREDITOR." A PERSON CONSIDERED A CREDITOR PURSUANT TO 12
2 CFR § 226.2(A)(17) (RELATING TO DEFINITIONS AND RULES OF
3 CONSTRUCTION).
4 "GROSS INCOME." AN OBLIGOR'S GROSS INCOME AS SET FORTH ON A
5 CREDIT APPLICATION, THE OBLIGOR'S FINANCIAL STATEMENT, A CREDIT
6 REPORT, FINANCIAL INFORMATION PROVIDED TO THE LENDER BY OR ON
7 BEHALF OF THE OBLIGOR OR AS DETERMINED BY ANY OTHER REASONABLE
8 MEANS BY A LENDER.
9 "LENDER." ANY CREDITOR THAT IN ANY 12-MONTH PERIOD
10 ORIGINATES AT LEAST ONE COVERED LOAN. THE CREDITOR TO WHOM THE
11 COVERED LOAN IS INITIALLY PAYABLE, EITHER ON THE FACE OF THE
12 NOTE OR CONTRACT OR BY AGREEMENT WHEN THERE IS NO NOTE OR
13 CONTRACT, SHALL BE DEEMED TO BE THE LENDER.
14 "MEDIAN FAMILY INCOME." MEDIAN FAMILY INCOME FOR THE
15 METROPOLITAN STATISTICAL AREA (MSA) AS DEFINED BY THE DIRECTOR
16 OF THE UNITED STATES OFFICE OF MANAGEMENT AND BUDGET IN WHICH
17 PROPERTY WHICH SECURES A COVERED LOAN IS LOCATED, OR FOR LOANS
18 SECURED BY PROPERTY NOT LOCATED WITHIN AN MSA, THE
19 NONMETROPOLITAN MEDIAN FAMILY INCOME FOR THE COMMONWEALTH, AS
20 REPORTED IN THE MOST RECENT ESTIMATES MADE AVAILABLE BY THE
21 UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT AT THE
22 TIME A LOAN APPLICATION IS RECEIVED OR THE LATEST SUCH ESTIMATES
23 MADE AVAILABLE IN THE PRECEDING CALENDAR YEAR, WHICHEVER AMOUNT
24 IS LOWER. TO THE EXTENT SUCH INFORMATION IS NOT READILY
25 AVAILABLE FROM THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN
26 DEVELOPMENT IN A FORM SUITABLE FOR USE BY LENDERS, THE
27 DEPARTMENT OF BANKING SHALL PERIODICALLY PUBLISH OR OTHERWISE
28 MAKE AVAILABLE TO LENDERS MEDIAN FAMILY INCOME INFORMATION FOR
29 MSAS AND NONMETROPOLITAN AREAS THAT MAY BE RELIED UPON BY
30 LENDERS FOR PURPOSES OF THIS CHAPTER.
20010S0377B1240 - 45 -
1 "MORTGAGE BROKER." A PERSON REQUIRED TO BE LICENSED AS A
2 MORTGAGE BROKER, LIMITED MORTGAGE BROKER OR LOAN CORRESPONDENT
3 PURSUANT TO THE ACT OF DECEMBER 22, 1989 (P.L.687, NO.90), KNOWN
4 AS THE MORTGAGE BANKERS AND BROKERS ACT, OR AS A SECONDARY
5 MORTGAGE LOAN BROKER PURSUANT TO THE ACT OF DECEMBER 12, 1980
6 (P.L.1179, NO.219), KNOWN AS THE SECONDARY MORTGAGE LOAN ACT.
7 "MUNICIPALITY." A COUNTY, CITY, BOROUGH, INCORPORATED TOWN
8 OR TOWNSHIP.
9 "OBLIGOR." EACH OBLIGOR, CO-OBLIGOR, COSIGNER OR GUARANTOR
10 OBLIGATED TO REPAY A COVERED LOAN.
11 "PERSON." A CORPORATION, PARTNERSHIP, LIMITED LIABILITY
12 COMPANY, BUSINESS TRUST OR ANY OTHER COMMON ENTERPRISE OR
13 UNDERTAKING INVOLVING TWO OR MORE PERSONS, ASSOCIATION OF TWO OR
14 MORE PERSONS, ESTATE, TRUST, FOUNDATION OR NATURAL PERSON.
15 "POLITICAL SUBDIVISION." A MUNICIPALITY, SCHOOL DISTRICT,
16 VOCATIONAL SCHOOL DISTRICT OR MUNICIPAL AUTHORITY.
17 "PRINCIPAL BALANCE." THE AMOUNT OF A PROMISSORY NOTE SECURED
18 BY A MORTGAGE IN A CONSUMER CREDIT MORTGAGE TRANSACTION.
19 "SERVICER." A SERVICER AS DEFINED IN SECTION 6(I)(2) OF THE
20 REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 (PUBLIC LAW 93-
21 533, 12 U.S.C. § 2605(I)(2)).
22 SECTION 504. RELATIONSHIP TO OTHER LAWS.
23 (A) GENERAL RULE.--ALL POLITICAL SUBDIVISIONS OF THIS
24 COMMONWEALTH, INCLUDING HOME RULE MUNICIPALITIES, SHALL BE
25 PROHIBITED FROM ENACTING AND ENFORCING ORDINANCES, RESOLUTIONS
26 AND REGULATIONS PERTAINING TO THE FINANCIAL OR LENDING
27 ACTIVITIES OF PERSONS WHO:
28 (1) ARE SUBJECT TO THE JURISDICTION OF THE DEPARTMENT,
29 INCLUDING ACTIVITIES SUBJECT TO THIS CHAPTER;
30 (2) ARE SUBJECT TO THE JURISDICTION OR REGULATORY
20010S0377B1240 - 46 -
1 SUPERVISION OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE
2 SYSTEM, THE OFFICE OF THE COMPTROLLER OF THE CURRENCY, THE
3 OFFICE OF THRIFT SUPERVISION, THE NATIONAL CREDIT UNION
4 ADMINISTRATION, THE FEDERAL DEPOSIT INSURANCE CORPORATION,
5 THE FEDERAL TRADE COMMISSION OR THE UNITED STATES DEPARTMENT
6 OF HOUSING AND URBAN DEVELOPMENT; OR
7 (3) THAT ORIGINATE, PURCHASE, SELL, ASSIGN, SECURITIZE
8 OR SERVICE PROPERTY INTERESTS OR OBLIGATIONS CREATED BY
9 FINANCIAL TRANSACTIONS OR LOANS MADE, EXECUTED OR ORIGINATED
10 BY PERSONS REFERRED TO IN PARAGRAPH (1) OR (2) OR ASSIST OR
11 FACILITATE SUCH TRANSACTIONS.
12 THE REQUIREMENTS OF THIS SUBSECTION SHALL APPLY TO ALL
13 ORDINANCES, RESOLUTIONS AND REGULATIONS PERTAINING TO FINANCIAL
14 OR LENDING ACTIVITIES, INCLUDING ANY ORDINANCES, RESOLUTIONS OR
15 REGULATIONS DISQUALIFYING PERSONS FROM DOING BUSINESS WITH A
16 POLITICAL SUBDIVISION BASED UPON FINANCIAL OR LENDING ACTIVITIES
17 OR IMPOSING REPORTING REQUIREMENTS OR ANY OTHER OBLIGATIONS UPON
18 PERSONS REGARDING FINANCIAL OR LENDING ACTIVITIES.
19 (B) CORPORATE POWERS.--NOTHING IN THIS CHAPTER SHALL BE
20 DEEMED TO LIMIT THE CORPORATE POWERS OF INCORPORATED
21 INSTITUTIONS OR THEIR SUBSIDIARIES SUBJECT TO THE ACT OF
22 NOVEMBER 30, 1965 (P.L.847, NO.356), KNOWN AS THE BANKING CODE
23 OF 1965, OR TO IMPOSE CONDITIONS, LIMITATIONS OR RESTRICTIONS
24 UPON THE EXERCISE OF SUCH POWERS CONTRARY TO THE PROVISIONS OF
25 SECTION 201 OF THE BANKING CODE OF 1965.
26 (C) PREEMPTION.--ANY PROVISION OF THIS CHAPTER PREEMPTED BY
27 FEDERAL LAW WITH RESPECT TO A NATIONAL BANK OR FEDERAL SAVINGS
28 ASSOCIATION SHALL NOT APPLY TO THE SAME EXTENT TO AN OPERATING
29 SUBSIDIARY OF A NATIONAL BANK OR FEDERAL SAVINGS ASSOCIATION
30 WHICH SATISFIES THE REQUIREMENTS FOR OPERATING SUBSIDIARIES
20010S0377B1240 - 47 -
1 ESTABLISHED IN 12 CFR § 5.34 (RELATING TO OPERATING
2 SUBSIDIARIES) OR 559.3 (RELATING TO WHAT ARE THE CHARACTERISTICS
3 OF, AND WHAT REQUIREMENTS APPLY TO, FOR SUBORDINATE
4 ORGANIZATIONS OF FEDERAL SAVINGS ASSOCIATIONS).
5 (D) INTERPRETATION.--THE PROVISIONS OF THIS CHAPTER SHALL BE
6 INTERPRETED AND APPLIED TO THE FULLEST EXTENT PRACTICAL IN A
7 MANNER CONSISTENT WITH APPLICABLE FEDERAL LAWS AND REGULATIONS,
8 POLICIES AND ORDERS OF FEDERAL REGULATORY AGENCIES AND SHALL NOT
9 BE DEEMED TO CONSTITUTE AN ATTEMPT TO OVERRIDE FEDERAL LAW.
10 SUBCHAPTER B
11 PROTECTION OF OBLIGORS
12 SECTION 511. LIMITATIONS ON COVERED LOAN TERMS.
13 (A) LIMITATION OF BALLOON PAYMENT.--NO COVERED LOAN MAY
14 CONTRACT FOR A SCHEDULED PAYMENT THAT IS MORE THAN TWICE AS
15 LARGE AS THE AVERAGE OF EARLIER SCHEDULED MONTHLY PAYMENTS
16 UNLESS SUCH BALLOON PAYMENT BECOMES DUE AND PAYABLE NOT LESS
17 THAN 120 MONTHS AFTER THE DATE OF THE LOAN. THIS PROHIBITION
18 DOES NOT APPLY WHEN THE PAYMENT SCHEDULED IS ADJUSTED TO ACCOUNT
19 FOR THE SEASONAL OR IRREGULAR INCOME OF THE OBLIGOR OR IF THE
20 PURPOSE OF THE LOAN IS A BRIDGE LOAN CONNECTED WITH OR RELATED
21 TO THE ACQUISITION OR CONSTRUCTION OF A DWELLING INTENDED TO
22 BECOME THE OBLIGOR'S PRINCIPAL DWELLING.
23 (B) NO CALL PROVISION.--NO COVERED LOAN MAY CONTAIN A CALL
24 PROVISION THAT PERMITS THE LENDER, IN ITS SOLE DISCRETION, TO
25 ACCELERATE THE INDEBTEDNESS. THIS PROHIBITION DOES NOT APPLY
26 WHEN REPAYMENT OF THE LOAN HAS BEEN ACCELERATED:
27 (1) BY DEFAULT;
28 (2) PURSUANT TO A DUE-ON-SALE PROVISION;
29 (3) WHERE THERE IS FRAUD OR MATERIAL MISREPRESENTATION
30 BY AN OBLIGOR IN CONNECTION WITH THE LOAN; OR
20010S0377B1240 - 48 -
1 (4) WHERE THERE IS ANY ACTION OR INACTION BY THE OBLIGOR
2 THAT ADVERSELY AFFECTS THE LENDER'S SECURITY FOR THE LOAN OR
3 ANY RIGHTS OF THE LENDER IN SUCH SECURITY.
4 (C) NO NEGATIVE AMORTIZATION.--EXCEPT FOR LOANS TO OBLIGORS
5 WITH GROSS INCOME IN EXCESS OF 150% OF MEDIAN FAMILY INCOME, NO
6 COVERED LOAN MAY CONTRACT FOR A PAYMENT SCHEDULE WITH REGULAR
7 PERIODIC PAYMENTS THAT CAUSE THE PRINCIPAL BALANCE TO INCREASE.
8 THIS SUBSECTION SHALL NOT PROHIBIT NEGATIVE AMORTIZATION AS A
9 CONSEQUENCE OF A TEMPORARY FORBEARANCE OR RESTRUCTURE CONSENTED
10 TO BY THE OBLIGOR.
11 (D) NO INCREASED INTEREST RATE UPON DEFAULT.--NO COVERED
12 LOAN MAY CONTRACT FOR ANY INCREASE IN THE INTEREST RATE AS A
13 RESULT OF A DEFAULT. THIS PROVISION SHALL NOT APPLY TO PERIODIC
14 INTEREST RATE CHANGES IN A VARIABLE RATE LOAN OTHERWISE
15 CONSISTENT WITH THE PROVISIONS OF THE LOAN AGREEMENT, PROVIDED
16 THE CHANGE IN THE INTEREST RATE IS NOT OCCASIONED BY THE EVENT
17 OF DEFAULT OR PERMISSIBLE ACCELERATION OF THE INDEBTEDNESS.
18 (E) NO ADVANCE PAYMENTS.--NO COVERED LOAN MAY INCLUDE TERMS
19 UNDER WHICH ANY PERIODIC PAYMENTS REQUIRED UNDER THE LOAN ARE
20 PAID IN ADVANCE FROM THE LOAN PROCEEDS.
21 (F) LIMITATIONS ON PREPAYMENT FEES.--THE FOLLOWING
22 LIMITATION ON PREPAYMENT FEES SHALL BE OBSERVED:
23 (1) A PREPAYMENT FEE OR PENALTY SHALL BE PERMITTED ONLY
24 DURING THE FIRST 60 MONTHS AFTER THE DATE OF EXECUTION OF A
25 COVERED LOAN.
26 (2) A LENDER SHALL NOT INCLUDE A PREPAYMENT FEE IN A
27 COVERED LOAN UNLESS IT ALSO MAKES AVAILABLE A LOAN PRODUCT
28 WITHOUT A PREPAYMENT FEE.
29 (3) NO PREPAYMENT FEE OR PENALTY MAY BE CHARGED ON A
30 REFINANCING OF A COVERED LOAN WITH A COVERED LOAN IF THE
20010S0377B1240 - 49 -
1 COVERED LOAN BEING REFINANCED IS OWNED BY THE REFINANCING
2 LENDER AT THE TIME OF SUCH REFINANCING.
3 SECTION 512. RESTRICTED ACTS AND PRACTICES.
4 (A) NO LENDING WITHOUT CAUTIONARY NOTICE.--A LENDER MAY NOT
5 MAKE A COVERED LOAN UNLESS THE LENDER OR A MORTGAGE BROKER HAS
6 GIVEN THE FOLLOWING NOTICE, OR SUBSTANTIALLY SIMILAR NOTICE, IN
7 WRITING, TO THE OBLIGOR NOT LATER THAN THE TIME THE NOTICE IS
8 REQUIRED UNDER THE NOTICE PROVISION CONTAINED IN 12 CFR
9 226.31(C) (RELATING TO GENERAL PROVISIONS) AS AMENDED FROM TIME
10 TO TIME.
11 NOTICE TO BORROWER
12 IF YOU OBTAIN THIS LOAN, THE LENDER WILL HAVE A MORTGAGE
13 ON YOUR HOME. YOU COULD LOSE YOUR HOME AND ANY MONEY YOU
14 PUT INTO IT IF YOU DO NOT MEET YOUR OBLIGATIONS UNDER THE
15 LOAN.
16 MORTGAGE LOAN RATES AND CLOSING COSTS AND FEES VARY BASED
17 ON MANY FACTORS, INCLUDING YOUR PARTICULAR CREDIT AND
18 FINANCIAL CIRCUMSTANCES, YOUR EMPLOYMENT HISTORY, THE
19 LOAN-TO-VALUE REQUESTED AND THE TYPE OF PROPERTY THAT
20 WILL SECURE YOUR LOAN. THE LOAN RATE AND FEES COULD ALSO
21 VARY BASED ON WHICH LENDER OR BROKER YOU SELECT. AS AN
22 OBLIGOR, YOU SHOULD SHOP AROUND AND COMPARE LOAN RATES
23 AND FEES.
24 YOU SHOULD ALSO CONSIDER CONSULTING A QUALIFIED
25 INDEPENDENT CREDIT COUNSELOR OR OTHER EXPERIENCED
26 FINANCIAL ADVISOR REGARDING THE RATE, FEES AND PROVISIONS
27 OF THIS MORTGAGE LOAN BEFORE YOU PROCEED. A LIST OF
28 QUALIFIED COUNSELORS IS AVAILABLE BY CONTACTING THE
29 PENNSYLVANIA HOUSING FINANCE AGENCY.
30 YOU ARE NOT REQUIRED TO COMPLETE THIS LOAN AGREEMENT
20010S0377B1240 - 50 -
1 MERELY BECAUSE YOU HAVE RECEIVED THESE DISCLOSURES OR
2 HAVE SIGNED A LOAN APPLICATION.
3 REMEMBER, PROPERTY TAXES AND HOMEOWNER'S INSURANCE ARE
4 YOUR RESPONSIBILITY. NOT ALL LENDERS PROVIDE ESCROW
5 SERVICES FOR THESE PAYMENTS. YOU SHOULD ASK YOUR LENDER
6 ABOUT THESE SERVICES.
7 ALSO, YOUR PAYMENTS ON EXISTING DEBTS CONTRIBUTE TO YOUR
8 CREDIT RATINGS. YOU SHOULD NOT ACCEPT ANY ADVICE TO
9 IGNORE YOUR REGULAR PAYMENTS TO YOUR EXISTING CREDITORS.
10 PROVISION OF A CONSUMER INFORMATION PAMPHLET OR OTHER
11 PUBLICATION PREPARED BY THE OFFICE OF CONSUMER PROTECTION OF THE
12 OFFICE OF ATTORNEY GENERAL REGARDING COVERED LOANS SHALL BE
13 DEEMED TO CONSTITUTE A SUBSTANTIALLY SIMILAR NOTICE.
14 (B) NO LENDING WITHOUT DUE REGARD TO REPAYMENT ABILITY.--A
15 LENDER SHALL NOT ENGAGE IN A PATTERN OR PRACTICE OF MAKING
16 COVERED LOANS BASED ON THE CONSUMER'S COLLATERAL WITHOUT REGARD
17 TO THE CONSUMER'S REPAYMENT ABILITY, INCLUDING, BUT NOT LIMITED
18 TO, THE CONSUMER'S CURRENT AND EXPECTED INCOME, CURRENT
19 OBLIGATIONS AS DISCLOSED TO THE LENDER BY THE LOAN APPLICATION
20 AND THE CONSUMER'S CREDIT REPORT, EMPLOYMENT STATUS AND OTHER
21 FINANCIAL RESOURCES OTHER THAN THE OBLIGOR'S EQUITY IN THE
22 DWELLING WHICH SECURES REPAYMENT OF THE LOAN. AN OBLIGOR SHALL
23 BE PRESUMED TO BE ABLE TO MAKE THE SCHEDULED PAYMENTS TO REPAY
24 THE OBLIGATION IF, AT THE TIME THE LOAN IS CONSUMMATED, THE
25 OBLIGOR'S SCHEDULED MONTHLY PAYMENTS AS DISCLOSED TO THE LENDER
26 BY THE LOAN APPLICATION AND THE CONSUMER'S CREDIT REPORT, DO NOT
27 EXCEED 50% OF THE OBLIGOR'S MONTHLY GROSS INCOME. FOR PURPOSES
28 OF DETERMINING MEDIAN INCOME, THE INCOME OF ALL OBLIGORS SHALL
29 BE CONSIDERED. THE REQUIREMENTS OF THIS SUBSECTION SHALL APPLY
30 ONLY TO OBLIGORS WHOSE INCOME, AS REPORTED ON THE LOAN
20010S0377B1240 - 51 -
1 APPLICATION, IS NO GREATER THAN 120% OF THE MEDIAN FAMILY
2 INCOME. NO PRESUMPTION SHALL ARISE THAT AN OBLIGOR IS NOT ABLE
3 TO MAKE THE SCHEDULED PAYMENTS IF THE OBLIGOR'S SCHEDULED
4 MONTHLY PAYMENTS EXCEED 50% OF THE OBLIGOR'S MONTHLY GROSS
5 INCOME AS DETERMINED PURSUANT TO THIS SUBSECTION.
6 (C) REFINANCING OF EXISTING COVERED LOAN WITH A NEW COVERED
7 LOAN.--A LENDER MAY NOT CHARGE ANY POINTS IN CONNECTION WITH A
8 COVERED LOAN IF THE PROCEEDS OF THE COVERED LOAN ARE USED TO
9 REFINANCE AN EXISTING COVERED LOAN HELD BY THE LENDER AND THE
10 LAST FINANCING WAS WITHIN ONE YEAR OF THE CURRENT REFINANCING;
11 PROVIDED, HOWEVER, THIS PROVISION SHALL NOT PROHIBIT A LENDER
12 FROM CHARGING POINTS IN CONNECTION WITH ANY ADDITIONAL PROCEEDS
13 PAID TO OR FOR THE ACCOUNT OF THE OBLIGOR, OTHER THAN CHARGES OR
14 COSTS ATTRIBUTABLE TO THE COVERED LOAN, IN CONNECTION WITH THE
15 REFINANCING. FOR PURPOSES OF THIS SUBSECTION, ADDITIONAL
16 PROCEEDS SHALL BE DEFINED AS THE AMOUNT OVER AND ABOVE THE
17 CURRENT PRINCIPAL BALANCE OF THE EXISTING COVERED LOAN;
18 PROVIDED, HOWEVER, IN THE EVENT THE LENDER REFUNDS ALL THE
19 POINTS ON THE COVERED LOAN BEING REFINANCED, THE ADDITIONAL
20 PROCEEDS SHALL BE THE PRINCIPAL BALANCE OF THE NEW COVERED LOAN.
21 (D) NO REFINANCING OF CERTAIN LOW-RATE LOANS.--A LENDER
22 SHALL NOT REPLACE OR CONSOLIDATE A ZERO INTEREST RATE OR LOW-
23 RATE LOAN MADE BY A GOVERNMENTAL OR NONPROFIT LENDER WITH A
24 COVERED LOAN WITHIN THE FIRST TEN YEARS OF THE ZERO INTEREST OR
25 LOW-RATE LOAN UNLESS THE CURRENT HOLDER OF THE LOAN CONSENTS IN
26 WRITING TO THE FINANCING. FOR PURPOSES OF THIS SUBSECTION, A
27 LOW-RATE LOAN SHALL BE DEFINED AS A LOAN THAT CARRIES A CURRENT
28 INTEREST RATE TWO PERCENTAGE POINTS OR MORE BELOW THE CURRENT
29 YIELD ON UNITED STATES TREASURY SECURITIES WITH A COMPARABLE
30 MATURITY.
20010S0377B1240 - 52 -
1 (E) RESTRICTIONS ON COVERED LOAN PROCEEDS TO PAY HOME
2 IMPROVEMENT CONTRACTS.--A LENDER SHALL NOT PAY A CONTRACTOR
3 UNDER A HOME IMPROVEMENT CONTRACT FROM THE PROCEEDS OF A COVERED
4 LOAN OTHER THAN BY AN INSTRUMENT PAYABLE TO THE OBLIGOR OR
5 JOINTLY TO THE OBLIGOR AND THE CONTRACTOR OR, AT THE ELECTION OF
6 THE OBLIGOR, THROUGH A THIRD-PARTY ESCROW AGENT IN ACCORDANCE
7 WITH TERMS ESTABLISHED IN A WRITTEN AGREEMENT SIGNED BY THE
8 OBLIGOR, THE LENDER AND THE CONTRACTOR PRIOR TO THE DISBURSEMENT
9 OF FUNDS TO THE CONTRACTOR.
10 (F) RESTRICTIONS ON SINGLE PREMIUM CREDIT INSURANCE.--A
11 LENDER SHALL NOT SELL ANY INDIVIDUAL OR GROUP CREDIT LIFE,
12 ACCIDENT AND HEALTH OR UNEMPLOYMENT INSURANCE PRODUCT ON A
13 PREPAID SINGLE PREMIUM BASIS IN CONJUNCTION WITH A COVERED LOAN
14 UNLESS THE FOLLOWING CONDITIONS ARE MET:
15 (1) AFTER THE EXPIRATION OF 18 MONTHS FROM THE DATE OF
16 ENACTMENT OF THIS CHAPTER AND FOR AN ADDITIONAL SIX-MONTH
17 PERIOD THAT MAY BE NECESSARY IN ORDER TO SECURE ANY NECESSARY
18 APPROVALS FOR A MONTHLY PREMIUM CREDIT INSURANCE PRODUCT BY
19 THE INSURANCE DEPARTMENT, IF A LENDER OFFERS ANY INDIVIDUAL
20 OR GROUP CREDIT LIFE, ACCIDENT AND HEALTH AND UNEMPLOYMENT
21 INSURANCE PRODUCTS PURCHASED ON A PREPAID SINGLE PREMIUM
22 BASIS IN CONJUNCTION WITH A COVERED LOAN, THE LENDER SHALL
23 OFFER THE OBLIGOR THE OPTION OF PURCHASING ALL SUCH INSURANCE
24 ON A MONTHLY PREMIUM BASIS.
25 (2) A LENDER SHALL NOT SELL CREDIT LIFE, ACCIDENT AND
26 HEALTH OR UNEMPLOYMENT INSURANCE PRODUCTS IN CONJUNCTION WITH
27 A COVERED LOAN OTHER THAN WHERE THE INSURANCE PREMIUMS ARE
28 CALCULATED, EARNED AND PAID ON A MONTHLY OR OTHER REGULAR,
29 PERIODIC BASIS WITHOUT PROVIDING A SEPARATE DISCLOSURE WITH A
30 COPY ACKNOWLEDGED BY THE INSURED NO LATER THAN THE TIME OF
20010S0377B1240 - 53 -
1 CLOSING IN A FORM SUBSTANTIALLY SIMILAR TO THE FOLLOWING:
2 INSURANCE NOTICE TO BORROWER(S)
3 YOU HAVE ELECTED TO PURCHASE CREDIT LIFE, ACCIDENT AND
4 HEALTH AND/OR UNEMPLOYMENT INSURANCE IN CONJUNCTION WITH
5 THIS MORTGAGE LOAN. THE COST OF THIS INSURANCE IS BEING
6 PREPAID AND FINANCED AT THE INTEREST RATE PROVIDED FOR IN
7 THE LOAN.
8 THIS INSURANCE IS NOT REQUIRED AS A CONDITION OF CLOSING
9 THIS LOAN AND HAS BEEN INCLUDED WITH THE LOAN AT YOUR
10 REQUEST.
11 AT ANY TIME YOU HAVE THE RIGHT TO CANCEL ANY OR ALL SUCH
12 POLICIES PURCHASED IN CONJUNCTION WITH THIS LOAN. YOU MAY
13 CANCEL YOUR POLICY OR POLICIES BY SIGNING AND RETURNING A
14 COPY OF THIS NOTICE TO YOUR LENDER OR YOU MAY CONTACT
15 YOUR LENDER DIRECTLY.
16 IF YOU CANCEL YOUR INSURANCE WITHIN 30 DAYS OF THE DATE
17 OF YOUR LOAN, THEN YOU WILL RECEIVE EITHER A FULL REFUND
18 OR A CREDIT AGAINST YOUR LOAN ACCOUNT. IF YOU CANCEL YOUR
19 INSURANCE AT ANY OTHER TIME, YOU WILL RECEIVE EITHER A
20 REFUND OR CREDIT AGAINST YOUR LOAN ACCOUNT OF ANY
21 UNEARNED PREMIUM.
22 YOU MUST CANCEL WITHIN 30 DAYS OF THE DATE OF THE LOAN TO
23 RECEIVE A FULL REFUND.
24 CREDIT INSURANCE CANCELLATION
25 I (WE) REQUEST THAT THE LENDER CANCEL THE __________
26 INSURANCE THAT I (WE) PURCHASED IN CONJUNCTION WITH MY (OUR)
27 MORTGAGE LOAN DATED _________.
28 ____________________________________________DATE
29 ____________________________________________BORROWER
30 ACKNOWLEDGMENT OF RECEIPT
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1 I (WE) ACKNOWLEDGE RECEIPT OF THE ABOVE NOTICE.
2 ______________________________________________DATE
3 ______________________________________________BORROWER
4 (3) IF AN OBLIGOR ELECTS TO CANCEL, WITHIN 30 DAYS OF
5 THE DATE OF THE COVERED LOAN, ANY INDIVIDUAL OR GROUP CREDIT
6 LIFE, ACCIDENT AND HEALTH OR UNEMPLOYMENT INSURANCE PRODUCT
7 PURCHASED ON PREPAID SINGLE PREMIUM BASIS IN CONJUNCTION WITH
8 A COVERED LOAN, THE LENDER OR THE INSURANCE COMPANY WHO SOLD
9 THE INSURANCE OR THE INSURANCE COMPANY PROVIDING THE PRODUCT
10 SHALL GIVE THE OBLIGOR EITHER A FULL PREMIUM REFUND OR A FULL
11 PREMIUM CREDIT AGAINST THE UNPAID LOAN BALANCE. IF THE
12 OBLIGOR ELECTS TO CANCEL ANY INDIVIDUAL OR GROUP CREDIT
13 INSURANCE PURCHASED IN CONJUNCTION WITH A COVERED LOAN AT ANY
14 OTHER TIME, THE REFUND OR CREDIT SHALL BE COMPUTED AS
15 PROVIDED OR PERMITTED BY STATE LAW. THE LENDER OR INSURANCE
16 COMPANY SHALL DECIDE WHETHER THE RETURN OF PREMIUM SHALL BE
17 BY MEANS OF CREDIT TO THE ACCOUNT OR BY REFUND TO THE
18 OBLIGOR.
19 THIS SUBSECTION SHALL NOT APPLY TO CREDIT LIFE, ACCIDENT, HEALTH
20 AND UNEMPLOYMENT INSURANCE SOLD BY THE LENDER FOR WHICH THE
21 OBLIGOR CHOOSES THE PRIMARY BENEFICIARY.
22 SECTION 513. ADDITIONAL REQUIREMENTS.
23 (A) REPORTING TO CREDIT BUREAUS.--A LENDER OR ITS SERVICER
24 SHALL REPORT AT LEAST QUARTERLY BOTH THE FAVORABLE AND
25 UNFAVORABLE PAYMENT HISTORY INFORMATION OF THE OBLIGOR ON
26 PAYMENTS DUE TO THE LENDER ON A COVERED LOAN TO A NATIONALLY
27 RECOGNIZED CONSUMER CREDIT REPORTING AGENCY. THIS SUBSECTION
28 SHALL NOT PREVENT A LENDER OR ITS SERVICER FROM AGREEING WITH
29 THE OBLIGOR NOT TO REPORT PAYMENT HISTORY INFORMATION IN THE
30 EVENT OF A RESOLVED OR UNRESOLVED DISPUTE WITH AN OBLIGOR AND
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1 SHALL NOT APPLY TO COVERED LOANS HELD OR SERVICED BY A LENDER
2 FOR LESS THAN 90 DAYS.
3 (B) VERIFICATION OF BROKER LICENSURE.--A LENDER SHALL VERIFY
4 THAT EACH MORTGAGE BROKER WITH WHOM IT DOES BUSINESS IN
5 CONNECTION WITH COVERED LOANS HOLDS A LICENSE OR OTHER
6 AUTHORIZATION CURRENTLY IN EFFECT TO DO BUSINESS WITHIN THIS
7 COMMONWEALTH.
8 CHAPTER C
9 ENFORCEMENT AND CIVIL LIABILITY
10 SECTION 521. ENFORCEMENT.
11 (A) ENFORCEMENT.--THE DEPARTMENT MAY CONDUCT EXAMINATIONS
12 AND INVESTIGATIONS AND ISSUE SUBPOENAS AND ORDERS TO ENFORCE THE
13 PROVISIONS OF THIS CHAPTER AS PROVIDED BY THE ACT OF MAY 15,
14 1933 (P.L.565, NO.111), KNOWN AS THE DEPARTMENT OF BANKING CODE
15 AND WITH RESPECT TO A PERSON LICENSED OR SUBJECT TO THE
16 FOLLOWING ACTS:
17 (1) ACT OF APRIL 8, 1937 (P.L.262, NO.66), KNOWN AS THE
18 CONSUMER DISCOUNT COMPANY ACT.
19 (2) ACT OF NOVEMBER 30, 1965 (P.L.847, NO.356), KNOWN AS
20 THE BANKING CODE OF 1965.
21 (3) ACT OF DECEMBER 14, 1967 (P.L.746, NO.345), KNOWN AS
22 THE SAVINGS ASSOCIATION CODE OF 1967,
23 (4) ACT OF DECEMBER 12, 1980 (P.L.1179, NO.219), KNOWN
24 AS THE SECONDARY MORTGAGE LOAN ACT.
25 (5) ACT OF DECEMBER 22, 1989 (P.L.687, NO.90), KNOWN AS
26 THE MORTGAGE BANKERS AND BROKERS ACT.
27 (6) 17 PA.C.S. (RELATING TO CREDIT UNIONS).
28 (B) EXAMINATIONS AND REPORTS.--THE DEPARTMENT MAY EXAMINE
29 ANY INSTRUMENT, DOCUMENT, ACCOUNT, BOOK, RECORD OR FILE OF A
30 PERSON ORIGINATING OR BROKERING A COVERED LOAN UNDER THIS
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1 CHAPTER. THE DEPARTMENT MAY RECOVER THE COST OF SUCH
2 EXAMINATIONS FROM THE PERSON. A PERSON ORIGINATING OR BROKERING
3 COVERED LOANS SHALL MAINTAIN ITS RECORDS IN A MANNER THAT WILL
4 FACILITATE THE DEPARTMENT DETERMINING WHETHER THE PERSON IS
5 COMPLYING WITH THE PROVISIONS OF THIS CHAPTER AND THE
6 REGULATIONS PROMULGATED UNDER THIS CHAPTER. THE DEPARTMENT MAY
7 REQUIRE THE SUBMISSION OF REPORTS BY PERSONS ORIGINATING OR
8 BROKERING COVERED LOANS WHICH SHALL SET FORTH SUCH INFORMATION
9 AS THE DEPARTMENT MAY REQUIRE.
10 (C) SUBPOENA.--IN THE EVENT THAT A PERSON FAILS TO COMPLY
11 WITH A SUBPOENA FOR DOCUMENTS OR TESTIMONY ISSUED BY THE
12 DEPARTMENT, THE DEPARTMENT MAY REQUEST AN ORDER FROM THE
13 COMMONWEALTH COURT REQUIRING THE PERSON TO PRODUCE THE REQUESTED
14 INFORMATION.
15 (D) ADMINISTRATIVE PENALTIES.--IF THE DEPARTMENT DETERMINES
16 THAT A PERSON HAS VIOLATED THE PROVISIONS OF THIS CHAPTER, THE
17 DEPARTMENT MAY DO ANY COMBINATION OF THE FOLLOWING THAT IT DEEMS
18 APPROPRIATE:
19 (1) IMPOSE A CIVIL PENALTY OF UP TO $2,000 FOR EACH
20 OFFENSE. THE DEPARTMENT MAY REQUIRE THE PERSON TO PAY
21 INVESTIGATIVE COSTS, IF ANY.
22 (2) SUSPEND, REVOKE OR REFUSE TO RENEW ANY LICENSE
23 ISSUED BY THE DEPARTMENT.
24 (3) PROHIBIT OR PERMANENTLY REMOVE AN INDIVIDUAL
25 RESPONSIBLE FOR A VIOLATION OF THIS CHAPTER FROM WORKING IN
26 HIS OR HER PRESENT CAPACITY OR IN ANY OTHER CAPACITY RELATED
27 TO ACTIVITIES REGULATED BY THE DEPARTMENT.
28 (4) ORDER A PERSON TO CEASE AND DESIST ANY VIOLATION OF
29 THIS CHAPTER AND TO MAKE RESTITUTION FOR ACTUAL DAMAGES TO
30 OBLIGORS.
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1 (5) IMPOSE SUCH OTHER CONDITIONS AS THE DEPARTMENT DEEMS
2 APPROPRIATE.
3 (E) HEARINGS.--ANY PERSON AGGRIEVED BY A DECISION OF THE
4 DEPARTMENT AND WHICH HAS A DIRECT INTEREST IN THE DECISION MAY
5 APPEAL THE DECISION OF THE DEPARTMENT TO THE SECRETARY OF
6 BANKING. THE APPEAL SHALL BE CONDUCTED IN ACCORDANCE WITH 2
7 PA.C.S. CH. 5 SUBCH. A (RELATING TO PRACTICE AND PROCEDURE OF
8 COMMONWEALTH AGENCIES).
9 (F) INJUNCTIONS.--THE DEPARTMENT MAY MAINTAIN AN ACTION FOR
10 AN INJUNCTION OR OTHER PROCESS AGAINST ANY PERSON TO RESTRAIN
11 AND PREVENT THE PERSON FROM ENGAGING IN ANY ACTIVITY VIOLATING
12 THIS CHAPTER.
13 (G) FINAL ORDERS.--A DECISION OF THE SECRETARY OF BANKING
14 SHALL BE A FINAL ORDER OF THE DEPARTMENT AND SHALL BE
15 ENFORCEABLE IN A COURT OF COMPETENT JURISDICTION. THE DEPARTMENT
16 SHALL PUBLISH THE FINAL ADJUDICATION ISSUED IN ACCORDANCE WITH
17 THIS SECTION, SUBJECT TO REDACTION OR MODIFICATION TO PRESERVE
18 CONFIDENTIALITY.
19 (H) APPEALS.--ANY PERSON AGGRIEVED BY A DECISION OF THE
20 SECRETARY OF BANKING AND WHICH HAS A DIRECT INTEREST IN THE
21 DECISION MAY APPEAL THE DECISION IN ACCORDANCE WITH 2 PA.C.S.
22 CH. 7 SUBCH. A (RELATING TO JUDICIAL REVIEW OF COMMONWEALTH
23 AGENCY ACTION).
24 SECTION 522. CIVIL LIABILITY.
25 (A) DAMAGES FOR MATERIAL VIOLATIONS.--IF A LENDER
26 PURPOSEFULLY ENGAGES IN A PATTERN OR PRACTICE OF MATERIAL
27 VIOLATIONS OF THIS CHAPTER, AN OBLIGOR ON A COVERED LOAN MAY
28 INITIATE A CIVIL ACTION TO RECOVER DAMAGES.
29 (B) EXCLUSIVE REMEDIES.--THE REMEDIES PROVIDED IN THIS
30 SUBCHAPTER SHALL BE THE SOLE AND EXCLUSIVE REMEDIES FOR ANY
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1 VIOLATION OF ANY PROVISION OF THIS CHAPTER. PERSONS ENGAGED IN
2 THE PURCHASE, SALE, ASSIGNMENT, SECURITIZATION OR SERVICING OF
3 COVERED LOANS SHALL NOT BE HELD LIABLE FOR THE ACTION OR
4 INACTIONS OF PERSONS ORIGINATING SUCH LOANS.
5 SECTION 523. INFORMATION SHARING.
6 THE DEPARTMENT MAY DIVULGE DOCUMENTARY OR OTHER INFORMATION
7 PERTAINING TO ENFORCEMENT OF THIS CHAPTER TO FEDERAL OR STATE
8 BANKING REGULATORY AGENCIES OR COMMONWEALTH AGENCIES AS MAY BE
9 NECESSARY OR APPROPRIATE FOR THE ENFORCEMENT OF THIS CHAPTER, AS
10 DETERMINED BY THE DISCRETION OF THE SECRETARY OF BANKING. THE
11 DEPARTMENT MAY ENTER INTO SUCH INFORMATION SHARING AGREEMENTS OR
12 OTHER TYPES OF REGULATORY AGREEMENTS WITH OTHER FEDERAL AND
13 STATE BANKING REGULATORY AGENCIES AS MAY BE REASONABLY NECESSARY
14 OR APPROPRIATE FOR THE ENFORCEMENT OF THIS CHAPTER, AS
15 DETERMINED BY THE DISCRETION OF THE SECRETARY OF BANKING.
16 SECTION 524. REGULATIONS.
17 THE DEPARTMENT MAY PROMULGATE REGULATIONS AND STATEMENTS OF
18 POLICY FOR THE ENFORCEMENT OF THIS CHAPTER, INCLUDING
19 REGULATIONS ESTABLISHING RULES OF PROCEDURE FOR THE CONDUCT OF
20 HEARINGS PURSUANT TO THIS SUBCHAPTER AND STANDARDS TO GOVERN THE
21 IMPOSITION OF CIVIL PENALTIES.
22 CHAPTER 31
23 MISCELLANEOUS PROVISIONS
24 SECTION 9. SECTION 19 OF THE ACT IS AMENDED TO READ:
25 SECTION [19] 3101. EFFECTIVE DATE.
26 THIS ACT SHALL TAKE EFFECT AS FOLLOWS:
27 (1) SECTIONS [10(A) AND (B), 11(B) AND (C)] 310(A) AND
28 (B) AND 311(B) AND (C) SHALL TAKE EFFECT IMMEDIATELY.
29 (2) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT IN 180
30 DAYS.
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1 SECTION 10. THE ADDITION OF SECTION 504(A) OF THE ACT IS
2 INTENDED TO RESTATE AND CONFIRM THE EXISTING LAW OF THIS
3 COMMONWEALTH, NAMELY THAT THE LAWS OF THIS COMMONWEALTH RELATING
4 TO THE FINANCIAL AND LENDING ACTIVITIES ARE TO BE APPLIED ON A
5 UNIFORM STATEWIDE BASIS. TO EFFECTUATE THIS INTENT, THE ADDITION
6 OF SECTION 504(A) OF THE ACT SHALL APPLY BOTH PROSPECTIVELY AND
7 RETROACTIVELY. THE REMAINDER OF CHAPTER 5 OF THE ACT SHALL APPLY
8 TO LOANS ORIGINATED AFTER THE EFFECTIVE DATE OF THIS SECTION.
9 SECTION 11. THIS ACT SHALL TAKE EFFECT AS FOLLOWS:
10 (1) THE FOLLOWING PROVISIONS SHALL TAKE EFFECT
11 IMMEDIATELY:
12 (I) THE ADDITION OF SECTION 504(A) OF THE ACT.
13 (II) SECTION 10 OF THIS ACT.
14 (III) THIS SECTION.
15 (2) EXCEPT AS PROVIDED IN PARAGRAPH (1)(I), THE ADDITION
16 OF CHAPTER 5 OF THE ACT SHALL TAKE EFFECT IN ONE YEAR.
17 (3) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT IN 60
18 DAYS.
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