1Amending Title 7 (Banks and Banking) of the Pennsylvania
2Consolidated Statutes, further providing for definitions, for
3license requirements, for exceptions to license requirements,
4for general requirements, for mortgage loan business
5prohibitions, for requirements as to open-end loans, for
6application for license, for prelicensing and continuing
7education, for licensee requirements, for licensee
8limitations, for surrender of license, for authority of
9department, for suspension, revocation or refusal, for
10penalties, for applicability and for procedure for
11determination on noncompliance with Federal law.

12The General Assembly of the Commonwealth of Pennsylvania
13hereby enacts as follows:

14Section 1. Sections 6102, 6111(a), 6112 and 6121(2), (8) and
15(13) of Title 7 of the Pennsylvania Consolidated Statutes are
16amended to read:

17§ 6102. Definitions.

18The following words and phrases when used in this chapter
19shall have the meanings given to them in this section unless the
20context clearly indicates otherwise:

21"Administrative or clerical tasks."  The receipt, collection
22and distribution of information common for the processing or

1underwriting of a mortgage loan and communication with a
2consumer to obtain information necessary for the processing or
3underwriting of a mortgage loan.

4"Advance fee." Any funds requested by or to be paid to a
5person in advance of or during the processing of a mortgage loan
6application, excluding those fees paid by a consumer directly to
7a credit agency reporting bureau, title company or real estate
8appraiser.

9"Applicant." A person who applies for a license under this
10chapter.

11"Application."  A request, in any form, for an offer, or a
12response to a solicitation of an offer, of mortgage loan terms,
13and the information about the borrower or prospective borrower
14that is customary or necessary in a decision on whether to make
15such an offer.

16"Banking institution." Any of the following:

17(1) A State-chartered bank, bank and trust company,
18savings bank or private bank.

19(2) A national bank.

20(3) A federally chartered or State-chartered savings
21association.

22(4) A subsidiary of any of the entities listed under
23this definition.

24"Billing cycle." In respect to open-end mortgage loans, the
25time interval between periodic billing dates. A billing cycle
26shall be considered to be a monthly cycle if the closing date of
27the cycle is the same date each month or does not vary by more
28than four days from that date.

29"Bona fide nonprofit organization."  A person that:

30(1) Has the status of a tax-exempt organization under

1section 501(c)(3) of the Internal Revenue Code of 1986
2(Public Law 99-514, 26 U.S.C. § 501(c)(3)).

3(2) Promotes affordable housing or provides
4homeownership education, or similar services.

5(3) Conducts its activities in a manner that serves
6public or charitable purposes.

7(4) Receives funding and revenue and charges fees in a
8manner that does not incentivize it or its employees to act
9other than in the best interests of its clients.

10(5) Compensates its employees in a manner that does not
11incentivize employees to act other than in the best interests
12of its clients.

13(6) Provides or identifies for the borrower mortgage
14loans with terms favorable to the borrower and comparable to
15mortgage loans and housing assistance provided under
16government housing assistance programs.

17(7) Meets other standards as determined by the
18department.

19"Branch." An office or other place of business, other than
20the principal place of business, where a person engages in the
21mortgage loan business subject to this chapter. The term does 
22not include a location where the licensee-sponsored mortgage 
23originator contacts consumers or processes mortgage loans, 
24provided that the location is not:

25(1) owned or controlled by a licensee. For purposes of
26this definition, a location is not considered to be owned or
27controlled by a licensee if the location is under the control
28of a subsidiary or affiliate of the licensee, is primarily
29used by the subsidiary or affiliate and is only used by the
30licensee on an incidental basis for the convenience of a

1consumer;

2(2) advertised or represented to consumers as an
3operating location of the mortgage originator or the mortgage
4originator's sponsor; or

5(3) a place where records regarding the licensee's
6mortgage loan business are stored.

7"Branch manager." The supervisor of a branch.

8"Clerical or support duties." Any of the following:

9(1) The receipt, collection, distribution and analysis
10of information common for the processing or underwriting of a
11mortgage loan.

12(2) Communicating with a consumer to obtain the
13information necessary for the processing or underwriting of a
14mortgage loan, to the extent that the communication does not
15include:

16(i) offering or negotiating mortgage loan rates or
17terms; or

18(ii) counseling consumers about mortgage loan rates
19or terms.

20"Commercial context." Acting for the purpose of obtaining
21anything of value for an individual, or for an entity or
22individual for which the individual acts, rather than
23exclusively for public, charitable or family purposes.

24"Commission." The Banking and Securities Commission of the
25Commonwealth, as established under Subarticle C of Article XI-A
26of the act of May 15, 1933 (P.L.565, No.111), known as the
27Department of Banking and Securities Code.

28"Consumer discount company." A licensee under the act of
29April 8, 1937 (P.L.262, No.66), known as the Consumer Discount
30Company Act.

1"Department." The Department of Banking and Securities of
2the Commonwealth.

3"Dwelling." As defined in section 103(v) of the Truth in
4Lending Act (Public Law 90-321, 15 U.S.C. § 1602(v)).

5"Employee."

6(1) An individual:

7(i) Whose manner and means of performance of work
8are subject to the right of control of, or are controlled
9by, a person.

10(ii) Whose compensation for Federal income tax
11purposes is reported, or required to be reported, on a W-
122 form issued by the controlling person.

13(2) The term includes such binding definition as may be
14issued by the Federal banking agencies in connection with
15their implementation of their responsibilities under the
16S.A.F.E. Mortgage Licensing Act of 2008 (110 Stat. 289, 12
17U.S.C. § 5101 et seq).

18"Federal banking agency." Any of the following:

19(1) The Board of Governors of the Federal Reserve
20System.

21(2) The Office of the Comptroller of the Currency.

22[(3) The Office of Thrift Supervision.

23(4)] (3) The National Credit Union Administration.

24[(5)] (4) The Federal Deposit Insurance Corporation.

25"Finder's fee." Any payment of money or other consideration
26for the referral of a mortgage loan to a licensee, except for
27consideration paid for goods or facilities actually furnished or
28services actually performed.

29"First mortgage loan." A loan which is:

30(1) made primarily for personal, family or household

1use; and

2(2) secured by any first lien mortgage, deed of trust or
3equivalent consensual security interest on a dwelling or on
4residential real estate.

5"First mortgage loan business." The mortgage loan business
6as applied to first mortgage loans.

7"Habitually and repeatedly." Engaging in any activity at
8least four times in a calendar year.

9"Holder." As defined in section 3 of the act of June 28,
101947 (P.L.1110, No.476), known as the Motor Vehicle Sales
11Finance Act.

12"Immediate family." A parent, spouse, child, brother or
13sister.

14"Installment sales contract." As defined in section 3(10) of
15the act of June 28, 1947 (P.L.1110, No.476), known as the Motor
16Vehicle Sales Finance Act.

17"Installment seller." As defined in section 3 of the act of
18June 28, 1947 (P.L.1110, No.476), known as the Motor Vehicle
19Sales Finance Act.

20"Lease-purchase agreement."

21(1) A deferred purchase of a dwelling or residential
22real estate whereby:

23(i) An individual makes installment payments to the
24seller of the dwelling or residential real estate.

25(ii) The seller retains title to the dwelling or
26residential real estate until some or all of the
27installment payments are completed.

28(2) The term does not include an agreement whereby:

29(i) An individual is not obligated to purchase the
30dwelling or residential real estate.

1(ii) The final payment approximates the fair value
2of the dwelling or residential real estate or the
3anticipated fair value of the dwelling or residential
4real estate and is not a nominal amount.

5"Licensee." A person who is licensed under this chapter.

6"Loan processor or underwriter." An individual who performs
7clerical or support duties [as an employee at the direction of
8and subject to the supervision and instruction of a person
9licensed or exempt from licensing under this chapter].

10"Lock-in agreement." An agreement between a mortgage lender
11and a consumer whereby the mortgage lender guarantees, until a
12specified date, the availability of a specified rate of interest
13or specified formula by which the rate of interest and a
14specific number of discount points will be determined, if the
15mortgage loan is approved and closed by the specified date. If a
16specified date is not determinable, the mortgage lender may
17fulfill the requirement of this definition by setting forth with
18specificity the method by which the duration of the lock-in
19period will be determined.

20"Manufactured home." Both of the following:

21(1) A manufactured home as defined in section 603(6) of
22the National Manufactured Housing Construction and Safety
23Standards Act of 1974 (Public Law 93-383, 42 U.S.C. §
245402(6)).

25(2) A mobile home as defined in 75 Pa.C.S. § 102
26(relating to definitions).

27"Mortgage broker." A person who engages in the mortgage loan
28business by directly or indirectly negotiating or placing
29mortgage loans for others in the primary market for
30consideration.

1"Mortgage lender." A person who engages in the mortgage loan
2business by directly or indirectly originating and closing
3mortgage loans with its own funds in the primary market for
4consideration.

5"Mortgage loan." A first or secondary mortgage loan, or
6both, a lease-purchase agreement or a mortgage loan 
7modification, as the context may require.

8"Mortgage loan business." The business of advertising,
9causing to be advertised, soliciting, negotiating or arranging
10in the ordinary course of business or offering to make or making
11mortgage loans.

12"Mortgage loan correspondent." A person who engages in the
13mortgage loan business by directly or indirectly originating and
14closing mortgage loans in his or her own name utilizing funds
15provided by a wholesale table funder or other funding sources
16under the circumstances described under section 6123(6)
17(relating to mortgage loan business prohibitions) and
18simultaneously assigning the mortgage loans to the wholesale
19table funder.

20"Mortgage loan modification." An agreement that revises the
21terms of an existing mortgage loan, including an agreement to
22reduce mortgage loan payment amounts, balance or interest rate
23or to waive any accrued or prospective mortgage loan charges.
24The term does not include any agreement to refinance a mortgage
25loan into a new mortgage loan.

26"Mortgage originator."

27[(1) An individual who takes a mortgage loan application
28or offers or negotiates terms of a mortgage loan for
29compensation or gain.

30(2) The term does not include any of the following:

1(i) An individual engaged solely as a loan processor
2or underwriter consistent with section 6112(8) (relating
3to exceptions to license requirements).

4(ii) A person or entity solely involved in
5extensions of credit relating to timeshare plans. As used
6in this paragraph, the term "timeshare plan" has the
7meaning given in 11 U.S.C. § 101(53D) (relating to
8definitions).

9(3) Except as set forth in paragraph (4), the term does
10not include an employee of a licensee or person exempt or
11excepted from licensure under this chapter who solely
12renegotiates terms for existing mortgage loans held or
13serviced by that licensee or person and who does not
14otherwise act as a mortgage originator.

15(4) The exclusion under paragraph (3) shall not apply if
16the United States Department of Housing and Urban Development
17or a court of competent jurisdiction determines that the
18S.A.F.E. Mortgage Licensing Act of 2008 (110 Stat. 289, 12
19U.S.C. § 5101 et seq.) requires such an employee to be
20licensed as a mortgage originator under state laws
21implementing the S.A.F.E. Mortgage Licensing Act of 2008.
22This paragraph is subject to section 6154 (relating to
23procedure for determination of noncompliance with Federal
24law).]

25(1) An individual who, in a commercial context and
26habitually and repeatedly does any of the following:

27(i) Takes a mortgage loan application.

28(ii) Offers or negotiates terms of a mortgage loan
29for compensation or gain.

30(iii) Represents to the public, through advertising

1or other means of communicating or providing information,
2including the use of business cards, stationary,
3brochures, signs, rate lists or other promotional items,
4that the individual can or will perform the activities
5described in subparagraphs (i) and (ii).

6(2) The term does not include any of the following:

7(i) An individual who is involved only in extensions
8of credit relating to timeshare plans, as that term is
9defined in 11 U.S.C. § 101(53D) (relating to
10definitions).

11(ii) An individual who performs only clerical or
12support duties and meets any of the following
13requirements:

14(A) Who does so at the direction of and subject
15to the supervision and instruction of an individual
16who:

17(I) Is licensed and registered in accordance
18with this chapter.

19(II) Is not required to be licensed in
20accordance with section 6112(9)(relating to
21exceptions to license requirements).

22(B) Who performs such duties solely with respect
23to transactions for which the individual who acts as
24a mortgage originator is not required to be licensed,
25in accordance with subparagraph (i), (v), or (vi).

26(iii) An individual who performs only purely
27administrative or clerical tasks on behalf of a mortgage
28originator.

29(iv) An individual who is a registered mortgage loan
30originator.

1(v) An individual employed by an agency or
2instrumentality of the Federal Government or a
3corporation otherwise created by an act of the Congress
4of the United States or an agency or instrumentality of a
5state or local government, the District of Columbia or
6any territory of the United States, including the
7Pennsylvania Housing Finance Agency and other government
8housing finance agencies, who acts as a mortgage
9originator within the scope of employment.

10(vi) An individual who is employed by a bona fide
11nonprofit organization who acts as a mortgage originator
12within the scope of employment.

13(vii) An individual employed by a licensee or person
14exempt or excepted from licensure under this chapter who
15solely engages in mortgage loan modifications for
16existing mortgage loans held or serviced by that licensee
17or person and who does not otherwise act as a mortgage
18originator.

19(viii) A loan processor or underwriter employed by a
20licensee or person exempt or excepted from licensure
21under this chapter, provided that the loan processor or
22underwriter:

23(A)  Is under the direct supervision and control
24of a licensed mortgage originator or registered
25mortgage loan originator.

26(B)  Acts as a loan processor or underwriter
27solely for the individual's employer.

28(C)  Does not represent to the public, through
29advertising or other means of communicating or
30providing information, including the use of business

1cards, stationery, brochures, signs, rate lists or
2other promotional items, that the person can or will
3perform any of the activities of a mortgage
4originator.

5"Nationwide Mortgage Licensing System and Registry." The
6licensing system developed and maintained by the Conference of
7State Bank Supervisors and the American Association of
8Residential Mortgage Regulators.

9"Net worth." Assets less liabilities and assets unacceptable
10to the United States Department of Housing and Urban Development
11for purposes of complying with 24 CFR § 202.5(n) (relating to
12general approval standards) or 202.8(b)(1) (relating to loan
13correspondent lenders and mortgagees), as applicable.

14"Nonoriginating person." A person, other than an individual,
15that does not engage in the mortgage loan business but is
16required to have loan processors or underwriters employed or
17supervised and controlled by the person licensed as mortgage
18originators.

19"Nontraditional mortgage loan." A mortgage loan other than a
2030-year fixed rate mortgage loan.

21"Offer or negotiate terms of a mortgage loan for compensation
22or gain."

23(1) (i) Presenting for consideration by a borrower or
24prospective borrower particular mortgage loan terms;

25(ii) communicating directly or indirectly with a
26borrower or prospective borrower for the purpose of
27reaching a mutual understanding about prospective
28mortgage loan terms; or

29(iii) recommending, referring or steering a borrower
30or prospective borrower to a particular lender or set of

1mortgage loan terms, in accordance with a duty to or
2incentive from any person other than the borrower or
3prospective borrower.

4(2) Receiving or expecting to receive payment of money
5or anything of value in connection with the activities
6described in paragraph (1) or as a result of any mortgage
7loan terms entered into as a result of those activities.

8"Open-end loan." A mortgage loan made by a mortgage lender
9under this chapter pursuant to an agreement between the mortgage
10lender and the consumer whereby all of the following apply:

11(1) The mortgage lender may permit the consumer to
12obtain advances of money from the licensee from time to time
13or the mortgage lender may advance money on behalf of the
14consumer from time to time as directed by the consumer.

15(2) The amount of each advance, interest and permitted
16charges and costs are debited to the consumer's account and
17payments and other credits are credited to the same account.

18(3) Interest is computed on the unpaid principal balance
19or balances of the account outstanding from time to time.

20(4) The consumer has the privilege of paying the account
21in full at any time or, if the account is not in default, in
22monthly installments of fixed or determinable amounts as
23provided in the open-end loan agreement.

24"Person." An individual, association, joint venture or
25joint-stock company, partnership, limited partnership, limited
26partnership association, limited liability company, business
27corporation, nonprofit corporation or any other group of
28individuals, however organized.

29"Primary market." The market wherein mortgage loans are
30originated between a lender and a consumer.

1"Principal place of business." The primary office of a
2person [which is staffed on a full-time basis and] at which the
3person's books, records, accounts and documents are maintained.

4"Purchase-money mortgage loan." A mortgage loan that is a
5residential mortgage transaction as defined in 12 CFR 226.2(a)
6(24) (relating to definitions and rules of construction).

7"Qualifying individual." An individual identified by a
8mortgage broker, mortgage lender or mortgage loan correspondent
9in the Nationwide Mortgage Licensing System and Registry who:

10(1) Is a mortgage originator or meets the licensing
11requirements of a mortgage originator.

12(2) Is a management-level officer assigned to the
13principal place of business of a mortgage broker, mortgage
14lender or mortgage loan correspondent.

15"Registered mortgage loan originator." An individual who
16complies with all of the following paragraphs:

17(1) Meets the definition of mortgage originator and is
18an employee of:

19(i) a banking institution or federally chartered or
20State-chartered credit union;

21(ii) a subsidiary owned and controlled by a
22federally chartered or State-chartered credit union and
23supervised by a Federal banking agency; or

24(iii) an institution regulated by the Farm Credit
25Administration.

26(2) Is registered with and maintains a unique identifier
27through the Nationwide Mortgage Licensing System and
28Registry.

29"Residential real estate." Real property upon which is
30constructed or intended to be constructed a dwelling.

1"Secondary mortgage loan." A loan which is:

2(1) made primarily for personal, family or household
3use; and

4(2) secured by any secondary lien mortgage, deed of
5trust or equivalent consensual security interest on a
6dwelling or on residential real estate.

7"Secondary mortgage loan business." The mortgage loan
8business as applied to secondary mortgage loans.

9"Service mortgage loan." A collecting or remitting payment
10for another, or the right to collect or remit payments for
11another, of principal, interest, tax, insurance or other payment
12under a mortgage loan.

13"Take a mortgage loan application." Receiving a mortgage
14loan application for the purpose of facilitating a decision
15whether to extend an offer of mortgage loan terms to a borrower
16or prospective borrower or to accept the terms offered by a
17borrower or prospective borrower in response to a solicitation,
18whether the application is received directly or indirectly from
19the borrower or prospective borrower.

20"Unique identifier." A number or other identifier assigned
21by the Nationwide Mortgage Licensing System and Registry.

22"Wholesale table funder." A licensed mortgage lender or
23person exempt under section 6112(1) or (7) (relating to
24exceptions to license requirements) who, in the regular course
25of business, provides the funding for the closing of mortgage
26loans through mortgage loan correspondents and who by assignment
27obtains title to the mortgage loans.

28§ 6111. License requirements.

29(a) General rule.--Except as provided under subsections (b)
30and (c) and section 6112 (relating to exceptions to license

1requirements), on and after the effective date of this section,
2no person shall engage in the mortgage loan business in this
3Commonwealth without being licensed as a mortgage broker,
4mortgage lender, mortgage loan correspondent or mortgage
5originator as provided under this chapter. A mortgage originator
6may not engage in the mortgage loan business unless the mortgage
7originator is [employed and supervised] sponsored in the 
8Nationwide Mortgage Licensing System and Registry by a licensed
9mortgage broker, mortgage lender or mortgage loan correspondent, 
10person excepted from this chapter or person excepted from 
11licensure under section 6112 and is under the direct supervision 
12and control of the sponsoring licensee or excepted person.

13* * *

14§ 6112. Exceptions to license requirements.

15The following persons shall not be required to be licensed
16under this chapter in order to conduct the mortgage loan
17business:

18(1) A banking institution or a federally chartered or
19State-chartered credit union, if the primary regulator of the
20banking institution or federally chartered or State-chartered
21credit union supervises the banking institution or federally
22chartered or State-chartered credit union. A banking 
23institution or a federally chartered or State-chartered 
24credit union may register with the department for the purpose 
25of having individuals under its direct supervision and 
26control licensed as mortgage originators, provided that the 
27registered entity meet any of the following requirements:

28(i) In the same manner as a mortgage lender, obtains
29and maintains bond coverage for mortgage originators
30consistent with section 6131(c)(5) (relating to

1application for license) and files a periodic report
2consistent with section 6135(a)(3) (relating to licensee
3requirements).

4(ii) Annually, in a form acceptable to the
5department, demonstrates to the department that all of
6the mortgage originators employed by or under the direct
7supervision and control of the entity have obtained and
8maintained the bond coverage required under section
96131(f)(4).

10(2) An attorney at law not otherwise engaged in or
11holding himself or herself out to the public as being engaged
12in the mortgage loan business who acts as a mortgage broker
13or a mortgage originator in negotiating or placing a mortgage
14loan in the normal course of legal practice. The exception 
15under this paragraph shall not apply if the attorney is 
16compensated by any of the following:

17(i) A mortgage broker.

18(ii) A mortgage lender.

19(iii) A mortgage loan correspondent.

20(iv) A person excepted from licensure under this
21section.

22(v) A mortgage originator.

23(vi) An agent of a person listed in subparagraphs
24(i), (ii), (iii), (iv) and (v).

25(3) A person who [offers or negotiates terms of a 
26mortgage loan with or on behalf of or makes a mortgage loan 
27to a member of the person's immediate family.] engages in the 
28mortgage loan business less than four times in a calendar 
29year, unless otherwise determined to be engaged in the 
30mortgage loan business by the department.

1(4) Any agency or instrumentality of the Federal
2Government or a corporation otherwise created by an act of
3the United States Congress, including the Federal National
4Mortgage Association, the Government National Mortgage
5Association, the Veterans' Administration, the Federal Home
6Loan Mortgage Corporation and the Federal Housing
7Administration, and employees thereof acting within the scope 
8of their employment. [To qualify for the exception under this 
9paragraph, the agency or instrumentality must ensure 
10employees required to be licensed as mortgage originators 
11have completed the requirements under section 6131.1 
12(relating to prelicensing and continuing education), have 
13obtained the required mortgage originator license and:

14(i) in the same manner as a mortgage lender, obtain
15and maintain bond coverage for mortgage originators
16consistent with section 6131(c)(5) (relating to
17application for license) and file an annual report
18consistent with section 6135(a)(3) (relating to licensee
19requirements); or

20(ii) annually, in a form acceptable to the
21department, demonstrate to the department that all of the
22mortgage originators employed by the agency or
23instrumentality have obtained and maintained the bond
24coverage required by section 6131(f)(4).]

25(5) Any agency or instrumentality of a state or local
26government, the District of Columbia or any territory of the
27United States, including the Pennsylvania Housing Finance
28Agency and other government housing finance agencies, and 
29employees thereof acting within the scope of their 
30employment. [To qualify for the exception under this 

1paragraph, the agency or instrumentality must ensure 
2employees required to be licensed as mortgage originators 
3have completed the requirements under section 6131.1, have 
4obtained the required mortgage originator license and:

5(i) in the same manner as a mortgage lender, obtain
6and maintain bond coverage for mortgage originators
7consistent with section 6131(c)(5) and file an annual
8report consistent with section 6135(a)(3); or

9(ii) annually, in a form acceptable to the
10department, demonstrate to the department that all of the
11mortgage originators employed by the agency or
12instrumentality have obtained and maintained the bond
13coverage required by section 6131(f)(4).]

14(6) Consumer discount companies, except that a consumer
15discount company that acts as a mortgage broker, mortgage
16lender or mortgage loan correspondent [other than under the
17provisions of the act of April 8, 1937 (P.L.262, No.66),
18known as the Consumer Discount Company Act], shall be subject
19to the provisions of Subchapter C (relating to mortgage loan
20business restrictions and requirements) and sections 6131(c)
21(2), (3) and (5), 6135, 6138 (relating to authority of
22department) and 6140(b) (relating to penalties). Employees or 
23individuals under the direct supervision and control of
24licensees under the Consumer Discount Company Act that act as
25mortgage originators shall be subject to the licensing
26requirements of this chapter. Consumer discount companies
27that employ or directly supervise and control mortgage
28originators shall be subject to the same requirements as
29mortgage lenders in regard to the employment and supervision
30of mortgage originators.

1(7) Affiliates of banking institutions and subsidiaries
2and affiliates of federally chartered or State-chartered
3credit unions. The exception under this paragraph does not 
4apply to consumer discount companies. Notwithstanding the 
5exception under this paragraph, subsidiaries and affiliates
6of federally chartered or State-chartered credit unions and 
7affiliates of banking institutions shall:

8(i) be subject to the provisions of Subchapter C and
9sections 6135(a)(2), (3) and (4), (b) and (c), 6138 and
106140(b);

11(ii) deliver as required to the department annually
12copies of financial reports made to all supervisory
13agencies;

14(iii) be registered with the department;

15(iv) in the same manner as a mortgage lender, obtain
16and maintain bond coverage for mortgage originators
17consistent with section 6131(c)(5); and

18(v) ensure employees required to be licensed as
19mortgage originators have completed the requirements
20under section 6131.1 (relating to prelicensing and 
21continuing education) and have obtained the required
22mortgage originator license.

23(8) Employees or individuals under the direct 
24supervision and control of a mortgage broker, mortgage lender
25or mortgage loan correspondent, or a person excepted from 
26licensure under this section, who[:

27(i) engage solely in loan processor or underwriter
28activities, and do not represent to the public, through
29advertising or other means of communicating or providing
30information, including the use of business cards,

1stationery, brochures, signs, rate lists or other
2promotional items, that they can or will perform any of
3the activities of a mortgage originator; or

4(ii)] are not otherwise required to be licensed as
5mortgage originators.

6(9) Registered mortgage loan originators when acting on 
7behalf of their employers.

8(11) [Nonprofit corporations not otherwise engaged in or
9holding themselves out to the public as being engaged in the
10mortgage loan business making mortgage loans to promote home
11ownership or improvements for the disadvantaged. To qualify 
12for the exception under this paragraph, the nonprofit 
13corporation must ensure employees required to be licensed as 
14mortgage originators have completed the requirements under 
15section 6131.1, have obtained the required mortgage 
16originator license and:

17(i) in the same manner as a mortgage lender, obtain
18and maintain bond coverage for mortgage originators
19consistent with section 6131(c)(5) and file an annual
20report consistent with section 6135(a)(3); or

21(ii) annually, in a form acceptable to the
22department, demonstrate to the department that all of the
23mortgage originators employed by the nonprofit
24corporation have obtained and maintained the bond
25coverage required by section 6131(f)(4).] A bona fide 
26nonprofit organization and employees of the organization 
27acting within the scope of their employment, unless 
28otherwise deemed to be engaged in the mortgage loan 
29business by the department, provided:

30(i) The organization shall be subject to the

1provisions of Subchapter C and sections 6135(a)(2), (3)
2and (4) and (c), 6138 and 6140(b).

3(ii) The organization shall be registered with the
4department.

5(iii) As required under 24 CFR § 3400.103(e)(7)(iii)
6(relating to individuals required to be licensed by
7states), the department must periodically examine the
8books and activities of an organization it determines is
9a bona fide nonprofit organization and revoke its status
10as a bona fide nonprofit organization if it does not
11continue to meet the criteria under 24 CFR §
123400.103(e)(7)(ii).

13(iv) For residential mortgage loans to have terms
14that are favorable to the borrower, the department must
15determine that the terms are consistent with loan
16origination in a public or charitable context, rather
17than a commercial context.

18(v) The department shall make the list of bona fide
19nonprofit organizations available on its Internet
20website.

21[(12) A nonprofit corporation not otherwise engaged in
22or holding itself out to the public as being engaged in the
23mortgage loan business which meets all of the following
24subparagraphs:

25(i) Does not make more than 12 mortgage loans in a
26calendar year with its own funds, not including funds
27borrowed through warehouse lines of credit or other
28sources for the purpose of making mortgage loans.

29(ii) Makes mortgage loans which are retained in the
30corporation's own portfolios and not regularly sold to

1others and are made to promote and advance the cultural
2traditions and lifestyles of bona fide religious
3organizations.

4(iii) Does either of the following:

5(A) In the same manner as a mortgage lender,
6obtains and maintains bond coverage for mortgage
7originators consistent with section 6131(c)(5) and
8files an annual report consistent with section
96135(a)(3).

10(B) Annually, in a form acceptable to the
11department, demonstrates to the department that all
12of the mortgage originators employed by the nonprofit
13corporation have obtained and maintained the bond
14coverage required by section 6131(f)(4).

15(iv) Ensures employees required to be licensed as
16mortgage originators have completed the requirements
17under section 6131.1 and have obtained the required
18mortgage originator license.]

19(13) An installment seller of, or holder of installment
20sales contracts secured by, manufactured homes who is
21licensed under the act of June 28, 1947 (P.L.1110, No.476),
22known as the Motor Vehicle Sales Finance Act, provided the
23installment seller or holder only engages in the mortgage
24loan business regarding installment sales contracts secured
25by manufactured homes that are purchase-money mortgage loans.
26To qualify for the exception under this paragraph, the
27installment seller or holder must:

28(i) Obtain a license as a mortgage originator, if
29licensed as an individual under the Motor Vehicle Sales
30Finance Act.

1(ii) Be registered with the department.

2(iii) Do either of the following:

3(A) In the same manner as a mortgage lender or
4mortgage broker, as applicable depending upon whether
5the installment seller or holder makes or brokers
6installment sales contracts secured by manufactured
7homes that are purchase-money mortgage loans, obtain
8and maintain bond coverage for mortgage originators
9consistent with section 6131(c)(5) or (e)(3) and file
10[an annual] a periodic report consistent with section
116135(a)(3); or

12(B) Annually demonstrate to the department that
13the mortgage originators employed by, or under the 
14direct supervision and control of, the installment
15seller or holder have obtained and maintained the
16bond coverage required by section 6131(f)(4) in a
17form acceptable to the department.

18(iv) Ensure employees or individuals under the 
19direct supervision and control of the installment seller 
20or holder required to be licensed as mortgage originators
21have completed the requirements under section 6131.1 and
22have obtained the required mortgage originator license.

23(14) A nonoriginating person, unless otherwise deemed to
24be engaged in the mortgage loan business by the department,
25except that the nonoriginating person shall:

26(i) Be subject to the provisions of Subchapter C and
27sections 6135(a)(2), (3) and (4) and (c), 6138 and
286140(b).

29(ii) Be registered with the department.

30(iii) In the same manner as a mortgage broker,

1obtain and maintain bond coverage for mortgage
2originators consistent with section 6131(c)(5).

3(iv) Ensure employees or individuals under the
4direct supervision and control of the person required to
5be licensed as mortgage originators have completed the
6requirements under section 6131.1 and have obtained the
7required mortgage originator license.

8(15) Notwithstanding section 6151 (relating to
9applicability), a mortgage originator licensed by one or more
10other states and physically located in this Commonwealth that
11does not engage in any transactions involving Pennsylvania
12consumers, dwellings or residential real estate.

13(16) A person who engages in mortgage loan modifications
14for existing mortgage loans held or serviced by that person
15or that person's employer and who does not otherwise engage
16in the mortgage loan business.

17§ 6121. General requirements.

18A licensee shall do all of the following:

19* * *

20(2) Comply with all applicable State law, including the
21provisions of the act of December 3, 1959 (P.L.1688, No.621),
22known as the Housing Finance Agency Law, that are applicable
23to the licensee and the act of December 9, 2002 (P.L.1530, 
24No.197), known as the Mortgage Satisfaction Act.

25* * *

26(8) If a mortgage loan is paid in full and, in the case
27of an open-end loan, the mortgage lender is no longer
28obligated to make future advances to the consumer, the
29mortgage lender shall do all of the following:

30(i) Cancel any insurance provided by the licensee in

1connection with the mortgage loan and refund to the
2consumer, in accordance with regulations promulgated by
3the Insurance Department, any unearned portion of the
4premium for the insurance.

5(ii) Stamp or write on the face of the mortgage loan
6agreement or promissory note evidencing the mortgage loan
7"Paid in Full" or "Canceled," the date paid and, within
860 days, return the mortgage loan agreement or promissory
9note to the consumer.

10(iii) Release any lien on [real property] the 
11dwelling or residential real estate and cancel the same
12of record and, at the time the mortgage loan agreement or
13promissory note evidencing the mortgage loan is returned,
14deliver to the consumer good and sufficient assignments,
15releases or any other certificate, instrument or document
16as may be necessary to evidence the release.

17* * *

18(13) In the case of a mortgage broker, mortgage lender or
19mortgage loan correspondent, do all of the following:

20(i) Maintain supervision and control of and
21responsibility for the acts and omissions of all mortgage
22originators [employed] sponsored by the licensee.

23(ii) Maintain a list of all current and former
24mortgage originators [employed] sponsored by the licensee
25and the dates of the [employment] sponsorship.

26(iii) In the event that a licensee believes that a
27mortgage originator [employed] sponsored by the licensee
28has engaged in any activity that is illegal or in
29violation of this chapter or any regulation or statement
30of policy promulgated under this chapter, the licensee

1shall provide the department with written notification of
2the belief and the licensee's proposed corrective
3measures within 30 days. A licensee shall not be liable
4to a mortgage originator in connection with the
5notification.

6* * *

7Section 2. Section 6123(8) of Title 7 is amended and the
8section is amended by adding a paragraph to read:

9§ 6123. Mortgage loan business prohibitions.

10A licensee engaging in the mortgage loan business shall not:

11* * *

12(8) In the case of a mortgage originator, accept any
13fees from consumers in the mortgage originator's own name. A
14mortgage originator may accept fees payable to the mortgage
15originator's [employer] sponsoring licensee and fees payable
16to third-party entities on behalf of the mortgage
17originator's [employer] sponsoring licensee. A mortgage
18originator may not accept advance fees payable to the
19mortgage originator's [employer] sponsoring licensee unless
20the licensee is authorized to collect advance fees under this
21chapter.

22(9) In the case of a mortgage originator, engage in the
23mortgage loan business other than on behalf of the single
24mortgage broker, mortgage lender or mortgage loan
25correspondent or a person excepted from this chapter or a
26person excepted from licensure under section 6112 (relating
27to exceptions to license requirements) that sponsors the
28mortgage originator.

29Section 3. Sections 6126(7), 6131, 6131.1(b), (c) and (d),
306135(a) and (b), 6136(a), 6137, 6138(b), (d), (e) and (f),

16139(a), 6140(b) and 6151 of the title are amended to read:

2§ 6126. Requirements as to open-end loans.

3The following shall apply:

4* * *

5(7) Notwithstanding any other provisions in this chapter
6to the contrary, a mortgage lender may retain any security
7interest in a dwelling or real or personal property until the
8open-end loan is terminated, provided that, if there is no
9outstanding balance in the account and there is no commitment
10by the licensee to make advances, the mortgage lender shall,
11within ten days following written demand by the consumer,
12deliver to the consumer a release of the mortgage, indenture,
13deed of trust or any other similar instrument or document on
14any [real property] dwelling or residential real estate taken
15as security for the open-end loan. The mortgage lender shall
16include on all billing statements provided in connection with
17an open-end loan a statement that the licensee retains a
18security interest in the consumer's [real property] dwelling 
19or residential real estate whenever the security interest has
20not been released.

21* * *

22§ 6131. Application for license.

23(a) Contents.--An application for a license under this
24chapter shall be on a form prescribed and provided by the
25department. Consistent with sections 202 E and 405 F(1) of the
26act of May 15, 1933 (P.L.565, No.111), known as the Department
27of Banking and Securities Code, all applicants and licensees
28shall use the Nationwide Mortgage Licensing System and Registry
29to obtain and maintain licenses under this chapter.

30(1) In the case of a mortgage broker, mortgage lender or

1mortgage loan correspondent, the application shall include
2the following:

3(i) The name of the applicant.

4(ii) The address of the principal place of business
5and any branches of the applicant [and the address or
6addresses where the applicant's mortgage loan business is
7to be conducted].

8(iii) The full name, official title and business
9address of each director and principal officer of the
10mortgage loan business.

11(iv) Any other information that may be required by
12the department.

13(2) In the case of a mortgage originator, the
14application shall include the following:

15(i) The name of the applicant.

16(ii) The name of the [employer licensee] sponsoring 
17licensee or excepted person of the applicant and location
18of the [employer licensee] excepted person or licensed 
19location of the licensee to which the applicant is
20assigned.

21(iii) Any other information that may be required by
22the department.

23(3) An applicant shall demonstrate to the department
24that policies and procedures have been developed to receive
25and process consumer inquiries and grievances promptly and
26fairly.

27(a.1) Licensing of principal place of business and
28branches.--All applicants and licensees must establish and
29maintain a separate license for the principal place of business
30and each branch.

1(b) Duty to update.--All applicants and licensees shall be
2required to provide the department with written notice of the
3change in any information contained in an application for a
4license or for any renewal of a license within ten days of an
5applicant or licensee becoming aware of the change.

6(c) Mortgage lender license.--The department shall issue a
7mortgage lender license applied for under this chapter if the
8applicant has:

9[(1) Been approved by or meets the current criteria for
10approval 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) Been approved for and will continue to maintain as a
15licensee a line of credit, repurchase agreement or equivalent
16mortgage-funding capability of not less than $1,000,000.

17(3) Established a minimum net worth of $250,000 at the
18time of application and will, at all times thereafter,
19maintain the minimum net worth.

20(4) Been approved for and will continue to maintain as a
21licensee fidelity bond coverage in accordance with the
22guidelines established by the Federal National Mortgage
23Association or the Federal Home Loan Mortgage Corporation.

24(5) Obtained and will maintain a surety bond in an
25amount that will provide coverage for the mortgage
26originators [employed] sponsored by the applicant or
27licensee, in a form acceptable to the department, prior to
28the issuance of the license, from a surety company authorized
29to do business in this Commonwealth. The following shall
30apply:

1(i) The amount of the bond shall be:

2(A) $100,000 for an applicant or licensee whose
3mortgage originators will originate or originated
4less than $30,000,000 in mortgage loans secured by
5Pennsylvania [real property] dwellings or residential 
6real estate in a calendar year;

7(B) $200,000 for an applicant or licensee whose
8mortgage originators will originate or originated
9$30,000,000 to $99,999,999.99 in mortgage loans
10secured by Pennsylvania [real property] dwellings or 
11residential real estate in a calendar year;

12(C) $300,000 for an applicant or licensee whose
13mortgage originators will originate or originated
14$100,000,000 to $249,999,999.99 in mortgage loans
15secured by Pennsylvania [real property] dwellings or 
16residential real estate in a calendar year; and

17(D) $500,000 for an applicant or licensee whose
18mortgage originators will originate or originated
19$250,000,000 or more in mortgage loans secured by
20Pennsylvania [real property] dwellings or residential 
21real estate in a calendar year.

22(ii) For an initial license applicant, the amount of
23the bond shall be determined by the applicant's
24anticipated amount of mortgage loans secured by
25Pennsylvania dwellings or residential real estate
26originated by its mortgage originators in the first
27calendar year of licensing. For a licensee, the amount of
28the bond shall be determined annually by the department
29based upon the amount of mortgage loans secured by
30Pennsylvania dwellings or residential real estate

1originated by the licensee's mortgage originators as
2indicated on the licensee's [annual] periodic report.

3(iii) The bond shall run to the Commonwealth and
4shall be for the use of the Commonwealth and for the use
5of any consumer who is injured by the acts or omissions
6of the licensee's mortgage originators that are related
7to the mortgage loan business regulated by this chapter.
8No bond shall comply with the requirements of this
9section unless it contains a provision that it shall not
10be canceled for any cause unless notice of intention to
11cancel is given to the department at least 30 days before
12the day upon which cancellation shall take effect.
13Cancellation of the bond shall not invalidate the bond
14regarding the period of time it was in effect.

15(6) Designated an individual as the qualifying
16individual for the principal place of business and separate
17individuals as branch managers for each branch, as
18applicable.

19(d) Mortgage loan correspondent license.--The department
20shall issue a loan correspondent's license applied for under
21this chapter if the applicant:

22(1) Obtains and will maintain a bond in the amount of
23$100,000, in a form acceptable to the department, prior to
24the issuance of the license, from a surety company authorized
25to do business in this Commonwealth. The bond shall run to
26the Commonwealth and shall be for the use of the Commonwealth
27and any person or persons who obtain a judgment against the
28mortgage loan correspondent for failure to carry out the
29terms of any provision for which advance fees are paid. No
30bond shall comply with the requirements of this section

1unless it contains a provision that it shall not be canceled
2for any cause unless notice of intention to cancel is given
3to the department at least 30 days before the day upon which
4cancellation shall take effect. A mortgage loan correspondent
5who can demonstrate to the satisfaction of the department
6that the correspondent does not and will not accept advance
7fees shall be exempt from the bond requirement of this
8paragraph.

9(2) Establishes a minimum net worth of $100,000 at the
10time of application and will, at all times thereafter,
11maintain the minimum net worth.

12(3) Obtains and will maintain a surety bond in an amount
13that will provide coverage for the mortgage originators
14[employed] sponsored by the applicant or licensee, in a form
15acceptable to the department, prior to the issuance of the
16license, from a surety company authorized to do business in
17this Commonwealth. The following shall apply:

18(i) The amount of the bond shall be $100,000 for an
19applicant or licensee whose mortgage originators will
20originate or originated less than $30,000,000 in mortgage
21loans secured by Pennsylvania dwellings or residential
22real estate in a calendar year; $200,000 for an applicant
23or licensee whose mortgage originators will originate or
24originated $30,000,000 to $99,999,999.99 in mortgage
25loans secured by Pennsylvania dwellings or residential
26real estate in a calendar year; $300,000 for an applicant
27or licensee whose mortgage originators will originate or
28originated $100,000,000 to $249,999,999.99 in mortgage
29loans secured by Pennsylvania dwellings or residential
30real estate in a calendar year; and $500,000 for an

1applicant or licensee whose mortgage originators will
2originate or originated $250,000,000 or more in mortgage
3loans secured by Pennsylvania dwellings or residential
4real estate in a calendar year.

5(ii) For an initial license applicant, the amount of
6the bond shall be determined by the applicant's
7anticipated amount of mortgage loans secured by
8Pennsylvania dwellings or residential real estate
9originated by its mortgage originators in the first
10calendar year of licensing. For a licensee, the amount of
11the bond shall be determined annually by the department
12based upon the amount of mortgage loans secured by
13Pennsylvania dwellings or residential real estate
14originated by the licensee's mortgage originators as
15indicated on the licensee's [annual] periodic report.

16(iii) The bond shall run to the Commonwealth and
17shall be for the use of the Commonwealth and for the use
18of any consumer who is injured by the acts or omissions
19of the licensee's mortgage originators that are related
20to the mortgage loan business regulated by this chapter.
21No bond shall comply with the requirements of this
22section unless it contains a provision that it shall not
23be canceled for any cause unless notice of intention to
24cancel is given to the department at least 30 days before
25the day upon which cancellation shall take effect.
26Cancellation of the bond shall not invalidate the bond
27regarding the period of time it was in effect.

28(4) Designates an individual as the qualifying
29individual for the principal place of business and separate
30individuals as branch managers for each branch, as

1applicable.

2(e) Mortgage broker license.--

3(1) The department shall issue a mortgage broker license
4applied for under this chapter if the applicant obtains and
5will maintain a bond in the amount of $100,000, in a form
6acceptable to the department, prior to the issuance of the
7license, from a surety company authorized to do business in
8this Commonwealth. The bond shall be a penal bond conditioned
9on compliance with this chapter and subject to forfeiture by
10the department and shall run to the Commonwealth for its use.
11The bond shall also be for the use of any person against the
12mortgage broker for failure to carry out the terms of any
13provision for which advance fees are paid. If the person is
14aggrieved, the person may, with the written consent of the
15department, recover advance fees and costs from the bond by
16filing a claim with the surety company or maintaining an
17action on the bond. In the alternative, an aggrieved person
18may recover advance fees and costs by filing a formal
19complaint against the mortgage broker with the department
20which shall adjudicate the matter. The adjudication shall be
21binding upon the surety company and enforceable by the
22department in Commonwealth Court and by an aggrieved person
23in any court. Any aggrieved person seeking to recover advance
24fees and costs from a bond that has already been forfeited by
25the department or which the department is in the process of
26forfeiting may recover payment on the bond if, after filing a
27petition with the department, the department consents to the
28aggrieved person's requested payment or portion thereof. The
29department may pay the aggrieved person from the bond
30proceeds it recovers. Nothing in this section shall be

1construed as limiting the ability of any court or magisterial
2district judge to award to any aggrieved person other
3damages, court costs and attorney fees as permitted by law,
4but those claims that are not advance fees or related costs
5may not be recovered from the bond. The department, in its
6discretion, may consent to or order pro rata or other
7recovery on the bond for any aggrieved person if claims
8against the bond may or do exceed its full monetary amount.
9No bond shall comply with the requirements of this section
10unless it contains a provision that it shall not be canceled
11for any cause unless notice of intention to cancel is given
12to the department at least 30 days before the day upon which
13cancellation shall take effect. Cancellation of the bond
14shall not invalidate the bond regarding the period of time it
15was in effect.

16(2) Mortgage brokers who can demonstrate to the
17satisfaction of the department that they do not and will not
18accept advance fees shall be exempt from the bond requirement
19of paragraph (1).

20(3) A mortgage broker shall obtain and maintain a surety
21bond in an amount that will provide coverage for the mortgage
22originators [employed] sponsored by the applicant or
23licensee, in a form acceptable to the department, prior to
24the issuance of the license, from a surety company authorized
25to do business in this Commonwealth. The following shall
26apply:

27(i) The amount of the bond shall be $50,000 for an
28applicant or licensee whose mortgage originators will
29originate or originated less than $15,000,000 in mortgage
30loans secured by Pennsylvania dwellings or residential

1real estate in a calendar year; $75,000 for an applicant
2or licensee whose mortgage originators will originate or
3originated $15,000,000 to $29,999,999.99 in mortgage
4loans secured by Pennsylvania dwellings or residential
5real estate in a calendar year; $100,000 for an applicant
6or licensee whose mortgage originators will originate or
7originated $30,000,000 to $49,999,999.99 in mortgage
8loans secured by Pennsylvania dwellings or residential
9real estate in a calendar year; and $150,000 for an
10applicant or licensee whose mortgage originators will
11originate or originated $50,000,000 or more in mortgage
12loans secured by Pennsylvania dwellings or residential
13real estate in a calendar year.

14(ii) For an initial license applicant, the amount of
15the bond shall be determined by the applicant's
16anticipated amount of mortgage loans secured by
17Pennsylvania dwellings or residential real estate
18originated by its mortgage originators in the first
19calendar year of licensing. For a licensee, the amount of
20the bond shall be determined annually by the department
21based upon the amount of mortgage loans secured by
22Pennsylvania dwellings or residential real estate
23originated by the licensee's mortgage originators as
24indicated on the licensee's [annual] periodic report.

25(iii) The bond shall run to the Commonwealth and
26shall be for the use of the Commonwealth and for the use
27of any consumer who is injured by the acts or omissions
28of the licensee's mortgage originators that are related
29to the mortgage loan business regulated by this chapter.
30No bond shall comply with the requirements of this

1section unless it contains a provision that it shall not
2be canceled for any cause unless notice of intention to
3cancel is given to the department at least 30 days before
4the day upon which cancellation shall take effect.
5Cancellation of the bond shall not invalidate the bond
6regarding the period of time it was in effect.

7(4) A mortgage broker shall designate an individual as
8the qualifying individual for the principal place of business
9and separate individuals as branch managers for each branch,
10as applicable.

11(f) Mortgage originator license.--A mortgage originator
12shall do all of the following:

13(1) Be an employee of [a single], or under the direct 
14supervision and control of, a licensed mortgage broker,
15mortgage lender or mortgage loan correspondent, a person
16excepted from this chapter or a person excepted from
17licensure under section 6112 (relating to exceptions to
18license requirements). The licensee or person shall sponsor 
19the mortgage originator in the Nationwide Mortgage Licensing 
20System and Registry and directly supervise, control and
21maintain responsibility for the acts and omissions of the
22mortgage originator.

23(2) Be assigned to and work out of a licensed location
24of the [employer] sponsoring licensee or a location of [an
25employer] a sponsoring person excepted from this chapter or
26excepted from licensure under section 6112[.], which, in the 
27case of a sponsoring licensee, may be either the mortgage 
28originator's residence or a location of the licensee that is 
29within 100 miles of the mortgage originator's residence.

30(3) Maintain a valid unique identifier issued by the

1Nationwide Mortgage Licensing System and Registry.

2(4) If a person excepted from this chapter or excepted
3from licensure under section 6112 does not elect to maintain
4bond coverage for its mortgage originators in the same manner
5as a mortgage lender, a mortgage originator employed by or 
6under the direct supervision and control of a person excepted
7from this chapter or excepted from licensure under section
86112 shall obtain and maintain a surety bond in an amount
9that will provide coverage for the mortgage originator, in a
10form acceptable to the department, prior to the issuance of
11the license, from a surety company authorized to do business
12in this Commonwealth. The following shall apply:

13(i) The amount of the bond shall be $25,000 for an
14applicant or licensee who will originate or originated
15less than $7,500,000 in mortgage loans secured by
16Pennsylvania dwellings or residential real estate in a
17calendar year; $50,000 for an applicant or licensee who
18will originate or originated $7,500,000 to $14,999,999.99
19in mortgage loans secured by Pennsylvania dwellings or 
20residential real estate in a calendar year; $75,000 for
21an applicant or licensee who will originate or originated
22$15,000,000 to $29,999,999.99 in mortgage loans secured
23by Pennsylvania dwellings or residential real estate in a
24calendar year; $100,000 for an applicant or licensee who
25will originate or originated $30,000,000 to
26$49,999,999.99 in mortgage loans secured by Pennsylvania
27dwellings or residential real estate in a calendar year;
28and $150,000 for an applicant or licensee who will
29originate or originated $50,000,000 or more in mortgage
30loans secured by Pennsylvania dwellings or residential

1real estate in a calendar year.

2(ii) For an initial license applicant, the amount of
3the bond shall be determined by the applicant's
4anticipated amount of mortgage loans secured by
5Pennsylvania dwellings or residential real estate
6originated in the first calendar year of licensing. For a
7licensee, the amount of the bond shall be determined
8annually by the department based upon the amount of
9mortgage loans secured by Pennsylvania dwellings or 
10residential real estate originated by the mortgage
11originator as indicated on the mortgage originator's
12[annual] periodic report.

13(iii) The bond shall run to the Commonwealth and
14shall be for the use of the Commonwealth and for the use
15of any consumer who is injured by the acts or omissions
16of the mortgage originator that are related to the
17mortgage loan business regulated by this chapter. No bond
18shall comply with the requirements of this section unless
19it contains a provision that it shall not be canceled for
20any cause unless notice of intention to cancel is given
21to the department at least 30 days before the day upon
22which cancellation shall take effect. Cancellation of the
23bond shall not invalidate the bond regarding the period
24of time it was in effect.

25(5) Only engage in the mortgage loan business on behalf
26of the single mortgage broker, mortgage lender or mortgage
27loan correspondent or a person excepted from this chapter or
28a person excepted from licensure under section 6112 that
29sponsors the mortgage originator.

30(g) Nationwide Mortgage Licensing System and Registry

1information challenge process.--A mortgage originator applicant
2or licensee may challenge the accuracy of information entered by
3the department to the Nationwide Mortgage Licensing System and
4Registry regarding the mortgage originator applicant or licensee
5by filing a written complaint with the department. The
6department shall review the complaint and alleged inaccurate
7information on the Nationwide Mortgage Licensing System and
8Registry and notify the applicant or licensee of corrective
9action taken by the department regarding the alleged inaccurate
10information within 30 days of receipt of the complaint.

11(h) License renewals.--Licenses shall be issued for terms
12[of 12] not to exceed 14 months and may be renewed by the
13department each year on a schedule set by the department upon
14application by the licensee and the payment of any and all
15applicable renewal fees. The licensee shall demonstrate to the
16department that it is conducting the mortgage loan business in
17accordance with the requirements of this chapter and that the
18licensee or directors, officers, partners, employees, mortgage 
19originators, agents and ultimate equitable owners of 10% or more
20of the licensee continue to meet all of the initial requirements
21for licensure required by this chapter unless otherwise
22determined by the department.

23(i) Out-of-State applicants.--

24(1) If an applicant is not a resident of this
25Commonwealth, as a condition to receiving a license under
26this chapter, the applicant shall be authorized to do
27business in this Commonwealth in accordance with the laws of
28this Commonwealth regulating corporations and other entities
29conducting business in this Commonwealth and shall maintain
30at least one office which is the office that shall be

1licensed as the principal place of business for the purposes
2of this chapter.

3(2) Out-of-State applicants shall file with the license
4application an irrevocable consent, duly acknowledged, that
5suits and actions may be commenced against that person in the
6courts of this Commonwealth by the service of process of any
7pleading upon the department in the usual manner provided for
8service of process and pleadings by the laws and court rules
9of this Commonwealth. The consent shall provide that this
10service shall be as valid and binding as if service had been
11made personally upon the person in this Commonwealth. In all
12cases where process or pleadings are served upon the
13department under the provisions of this section, the process
14or pleadings shall be served in triplicate; one copy shall be
15filed in the department's offices and the others shall be
16forwarded by the department, by certified or registered mail,
17return receipt requested, to the last known principal place
18of business of the person.

19(j) Disclosure of mortgage originator information.--
20Notwithstanding section 302 of the act of May 15, 1933 (P.L.565,
21No.111), known as the Department of Banking and Securities Code,
22the department shall make available to the public, including by
23access to the Nationwide Mortgage Licensing System and Registry,
24the employment history of a mortgage originator.

25§ 6131.1. Prelicensing and continuing education.

26* * *

27(b) Prelicensing education.--

28(1) A mortgage originator applicant, and at least one 
29[partner or ultimate equitable owner of 10% or more of an 
30applicant other than a mortgage originator] qualifying 

1individual of a mortgage broker, mortgage lender or mortgage 
2loan correspondent applicant, shall complete at least 20 
3hours of education programs approved in accordance with 
4paragraph (2), which shall include all of the following:

5(i) Three hours of Federal law and regulations.

6(ii) Three hours of ethics, which shall include
7instruction on fraud, consumer protection and fair
8lending issues.

9(iii) Two hours of training related to lending
10standards for the nontraditional mortgage loan
11marketplace.

12(iv) Three hours of Pennsylvania law and
13regulations, including this chapter, the act of December
143, 1959 (P.L.1688, No.621), known as the Housing Finance
15Agency Law, and the act of January 30, 1974 (P.L.13,
16No.6), referred to as the Loan Interest and Protection
17Law.

18(2) Prelicensing education programs shall be reviewed
19and approved by the Nationwide Mortgage Licensing System and
20Registry or as otherwise determined by the department based
21upon reasonable standards. Review and approval of a
22prelicensing education program shall include review and
23approval of the program provider.

24(3) A prelicensing education program approved by the
25Nationwide Mortgage Licensing System and Registry or as
26otherwise determined by the department may be provided by the
27[employer] sponsor of the applicant or an entity which is
28affiliated with the applicant by an agency contract, or any
29subsidiary or affiliate of such [employer] sponsor or entity.

30(4) Prelicensing education programs may be offered

1either in a classroom, online or by any other means approved
2by the Nationwide Mortgage Licensing System and Registry or
3as otherwise determined by the department.

4(5) Except for prelicensing education programs under
5paragraph (1)(iv), prelicensing education programs approved
6by the Nationwide Mortgage Licensing System and Registry or
7as otherwise determined by the department and completed for
8another State license application shall be accepted as credit
9toward completion of the prelicensing education requirements
10of this chapter [if the education programs have been
11successfully completed within the 12 months immediately
12preceding the date of the submission of the applicant's
13license application].

14(6) An applicant that was previously licensed under this
15chapter that is applying to become licensed again under this
16chapter must demonstrate that the applicant has completed all
17of the continuing education requirements for the year in
18which the applicant was last licensed under this chapter.

19(c) Prelicensing written test.--

20(1) A mortgage originator applicant, and at least one 
21[partner or ultimate equitable owner of 10% or more of an 
22applicant other than a mortgage originator] qualifying 
23individual of a mortgage broker, mortgage lender or mortgage 
24loan correspondent applicant, shall pass, in accordance with 
25the standards established under this subsection, a qualified 
26written test developed by the Nationwide Mortgage Licensing 
27System and Registry and administered by a test provider 
28approved by the Nationwide Mortgage Licensing System and 
29Registry based upon reasonable standards. The [portion of 
30the] department may also require applicants to pass a test 

1regarding Pennsylvania-specific law, which shall be 
2administered by a test provider approved by the department or 
3as otherwise determined by the department under subsection 
4(e).

5(2) A written test shall not be treated as a qualified
6written test for purposes of paragraph (1) unless the test
7adequately measures the applicant's knowledge and
8comprehension in appropriate subject areas, including:

9(i) Ethics.

10(ii) Federal law and regulation pertaining to
11mortgage origination.

12(iii) Pennsylvania law and regulation pertaining to
13mortgage origination, unless otherwise determined by the 
14department.

15(iv) Federal and Pennsylvania law and regulation
16related to fraud, consumer protection, the nontraditional
17mortgage marketplace and fair lending issues.

18(3) A test provider approved by the Nationwide Mortgage
19Licensing System and Registry or as otherwise determined by
20the department may provide a test at the location of the
21[employer] sponsor of the applicant or an entity which is
22affiliated with the applicant by an agency contract, or any
23subsidiary or affiliate of the [employer] sponsor or entity.

24(4) (i) An applicant shall not be considered to have
25passed a qualified written test unless the individual
26achieves a test score of not less than 75% correct
27answers to questions.

28(ii) An applicant may [retake] take a test three
29consecutive times with each consecutive taking occurring
30at least 30 days after the preceding test.

1(iii) After failing three consecutive tests, an
2applicant shall wait at least six months before taking
3the test again.

4(iv) A formerly licensed mortgage originator
5applicant who has been unlicensed for five continuous
6years or longer shall retake a test. Any time during
7which the individual is a registered mortgage loan
8originator shall not be counted toward the five-year
9continuous period.

10(d) Continuing education.--

11(1) A licensee who is a mortgage originator and [one 
12individual from each licensed office] all branch managers and 
13qualifying individuals of a mortgage broker, mortgage lender 
14or mortgage loan correspondent [that is not a mortgage 
15originator, unless all of the nonclerical staff of a 
16particular licensed office are licensed as mortgage 
17originators,] shall annually complete at least eight hours of 
18education programs in accordance with paragraph (2), which 
19shall include all of the following:

20(i) Three hours of Federal law and regulations.

21(ii) Two hours of ethics, which shall include
22instruction on fraud, consumer protection and fair
23lending issues.

24(iii) Two hours of training related to lending
25standards for the nontraditional mortgage loan
26marketplace.

27(iv) One hour of Pennsylvania law, including this
28chapter, the act of December 3, 1959 (P.L.1688, No.621),
29known as the Housing Finance Agency Law, and the act of
30January 30, 1974 (P.L.13, No.6), referred to as the Loan

1Interest and Protection Law.

2(2) Continuing education programs shall be reviewed and
3approved by the Nationwide Mortgage Licensing System and
4Registry or as otherwise determined by the department based
5upon reasonable standards. Review and approval of a
6continuing education program shall include review and
7approval of the program provider.

8(3) A continuing education program approved by the
9Nationwide Mortgage Licensing System and Registry or as
10otherwise determined by the department may be provided by the
11[employer] sponsor of the licensee or an entity which is
12affiliated with the licensee by an agency contract, or any
13subsidiary or affiliate of the [employer] sponsor or entity.

14(4) Continuing education programs may be offered either
15in a classroom, online or by any other means approved by the
16Nationwide Mortgage Licensing System and Registry or as
17otherwise determined by the department.

18(5) A licensee may only receive credit for a continuing
19education program in the year in which the program is taken
20and may not take the same continuing education program in the
21same or successive years to meet the requirements of this
22subsection.

23(6) A licensed mortgage originator who is an instructor
24of an approved continuing education program may receive
25credit for the licensed mortgage loan originator's own
26continuing education requirement at the rate of two hours
27credit for every one hour taught.

28(7) Except for the continuing education program under
29paragraph (1)(iv), continuing education programs approved by
30the Nationwide Mortgage Licensing System and Registry or as

1otherwise determined by the department and completed for
2another state shall be accepted as credit toward completion
3of the continuing education requirements of this chapter.

4(8) An individual who is a mortgage originator, branch
5manager or qualifying individual of a mortgage broker,
6mortgage lender or mortgage loan correspondent is not
7required to complete the requirements of this subsection in
8any licensing year in which the individual has completed the
9requirements of subsection (b).

10* * *

11§ 6135. Licensee requirements.

12(a) Requirements of licensee.--

13[(1) A licensee who is a mortgage broker, mortgage
14lender or mortgage loan correspondent shall conspicuously
15display, at each licensed place of business, its license and
16copies of the licenses of all mortgage originators assigned
17to that location. A licensee who is a mortgage originator
18shall keep the license in the immediate possession of the
19licensee whenever the licensee is engaged in the mortgage
20loan business.]

21(2) Each licensee shall maintain at its principal place
22of business, or at another place if agreed to by the
23department, the original or a copy of any books, accounts,
24records and documents, or electronic or similar access
25thereto, of the business conducted under the license as
26prescribed by the department to enable the department to
27determine whether the business of the licensee is being
28conducted in accordance with the provisions of this chapter
29and the regulations, statements of policy or orders issued
30under this chapter. All instruments, documents, accounts, 

1books and records relating to the mortgage loan business 
2shall be kept separate and apart from the records of any 
3other business conducted by the licensee. Records of first 
4and secondary mortgage loans shall be easily distinguishable 
5and easily separated. All records shall be preserved and kept 
6available for investigation or examination by the department 
7for a period of four years, unless otherwise determined by 
8the department. The department shall have free access to and
9authorization to examine records maintained by the licensee.
10The costs of the examination, including travel costs, shall
11be borne by the licensee. The department may deny or revoke
12the authority to maintain records at another place for good
13cause in the interest of protection for Commonwealth
14consumers, including for the licensee's failure to provide
15books, accounts, records or documents to the department upon
16request.

17(3) A mortgage broker, mortgage lender or mortgage loan
18correspondent, or a mortgage originator that is required to 
19obtain and maintain its own bond coverage under section 
206131(f)(4) (relating to application for license), [on a date
21determined by the department,] shall file periodically, as 
22determined by the department, a report with the department or 
23the Nationwide Mortgage Licensing System and Registry, as 
24determined by the department, setting forth such information
25as the department shall require concerning the first or
26secondary mortgage loan business conducted by the licensee
27[during the preceding calendar year. The report shall be on a
28form provided by the department and shall be filed with the 
29Nationwide Mortgage Licensing System and Registry]. Licensees
30who fail to file the required report at the date required by

1the department may be subject to a penalty of $100 for each
2day after the due date until the report is filed.

3(4) Each licensee shall be subject to examination by the
4department at its discretion, at which time the department
5shall have free access, during regular business hours, to the
6licensee's place or places of business and to all
7instruments, documents, accounts, books and records which
8pertain to a licensee's first or secondary mortgage loan
9business. The department may examine a licensee at any time
10if the department deems the examination to be necessary or
11desirable. The cost of any such examination shall be borne by
12the licensee.

13(5) Each licensee shall include in all advertisements
14[language indicating that the licensee is licensed by the
15department. In the case of a mortgage originator, all
16advertising shall include the name of the mortgage
17originator's employer and the mortgage originator's unique 
18identifier] the licensee's unique identifier.

19(b) Accounting records.--[The] For licensees with minimum 
20net worth requirements pursuant to this chapter, the licensee's
21accounting records must be constructed and maintained in
22compliance with generally accepted accounting principles or as
23provided by department regulation.

24* * *

25§ 6136. Licensee limitations.

26(a) Name and changes to name.--A licensee cannot transact
27any business under this chapter under any other name or names
28except those names designated in its license. A mortgage
29originator may not use any other name other than the mortgage
30originator's personal legal name. A licensee that changes its

1name or place or places of business shall notify the department
2or the Nationwide Mortgage Licensing System and Registry, as 
3determined by the department, within ten days of the change[,
4and the department shall issue a certificate to the licensee, if
5appropriate, which shall specify the licensee's new name or
6address].

7* * *

8§ 6137. Surrender of license.

9Upon satisfying the department that all creditors of a
10licensee have been paid or that other arrangements satisfactory
11to the creditors and the department have been made, a licensee
12may voluntarily surrender its license to the department by
13[delivering its license to the department with] providing the 
14department or the Nationwide Mortgage Licensing System and 
15Registry, as determined by the department, written notice that
16the license is being voluntarily surrendered, but an action by a
17licensee shall not affect the licensee's civil or criminal
18liability for acts committed.

19§ 6138. Authority of department.

20* * *

21(b) Hearings.--A person aggrieved by a decision of the
22department may appeal the decision of the department to the
23[Secretary of Banking] commission. The appeal shall be conducted
24under 2 Pa.C.S. Ch. 5 Subch. A (relating to practice and
25procedure of Commonwealth agencies).

26* * *

27(d) Final orders.--A decision of the [Secretary of Banking] 
28commission, or an unappealed order of the department, shall be a
29final order of the department and shall be enforceable in a
30court of competent jurisdiction. The department may publish

1final adjudications issued under this section, subject to
2redaction or modification to preserve confidentiality. The 
3department shall regularly report violations of this chapter, 
4enforcement actions and other relevant information to the 
5Nationwide Mortgage Licensing System and Registry.

6(e) Appeals.--A person aggrieved by a decision of the
7[Secretary of Banking] commission may appeal the decision under
82 Pa.C.S. Ch. 7 Subch. A. (relating to judicial review of
9Commonwealth agency action).

10(f) Orders affecting mortgage originators.--An order issued
11against a licensee is applicable to the mortgage originators
12[employed] sponsored by the licensee.

13§ 6139. Suspension, revocation or refusal.

14(a) Departmental action.--The department may suspend, revoke
15or refuse to renew a license issued under this chapter if any
16fact or condition exists or is discovered which, if it had
17existed or had been discovered at the time of filing of the
18application for the license, would have warranted the department
19in refusing to issue the license or if a licensee or director,
20officer, partner, employee, mortgage originator or owner of a
21licensee has:

22(1) Made a material misstatement in an application or
23any report or submission required by this chapter or any
24department regulation, statement of policy or order.

25(2) Failed to comply with or violated any provision of
26this chapter or any regulation or order promulgated or issued
27by the department under this chapter.

28(3) Engaged in dishonest, fraudulent or illegal
29practices or conduct in a business or unfair or unethical
30practices or conduct in connection with the mortgage loan

1business.

2(4) Been convicted of or pleaded guilty or nolo
3contendere to a crime of moral turpitude or felony.

4(5) Permanently or temporarily been enjoined by a court
5of competent jurisdiction from engaging in or continuing
6conduct or a practice involving an aspect of the mortgage
7loan business.

8(6) Become the subject of an order of the department
9denying, suspending or revoking a license applied for or
10issued under this chapter.

11(7) Become the subject of a United States Postal Service
12fraud order.

13(8) Failed to comply with the requirements of this
14chapter to make and keep records prescribed by regulation,
15statement of policy or order of the department, to produce
16records required by the department or to file financial
17reports or other information that the department by
18regulation, statement of policy or order may require.

19(9) Become the subject of an order of the department
20denying, suspending or revoking a license under the
21provisions of any other law administered by the department.

22(10) Demonstrated negligence or incompetence in
23performing an act for which the licensee is required to hold
24a license under this chapter.

25(11) Accepted an advance fee without having obtained the
26bond required by section 6131(d)(1) or (e)(1) (relating to
27application for license).

28(12) Become insolvent, meaning that the liabilities of
29the applicant or licensee exceed the assets of the applicant
30or licensee or that the applicant or licensee cannot meet the

1obligations of the applicant or licensee as they mature or is
2in such financial condition that the applicant or licensee
3cannot continue in business with safety to the customers of
4the applicant or licensee.

5(13) Failed to complete the requirements of section 
66131.1 (relating to prelicensing and continuing education).

7(14) In the case of a mortgage broker, mortgage lender
8or mortgage loan correspondent, conducted the mortgage loan
9business through an unlicensed mortgage originator.

10(15) Failed to comply with the terms of any agreement
11under which the department authorizes a licensee to maintain
12records at a place other than the licensee's principal place
13of business.

14* * *

15§ 6140. Penalties.

16* * *

17(b) Violation by licensee.--A person licensed under this
18chapter or director, officer, owner, partner, employee, mortgage 
19originator or agent of a licensee who violates a provision of
20this chapter or who commits any action which would subject the
21licensee to suspension, revocation or nonrenewal under section
226139 may be fined by the department up to $10,000 for each
23offense.

24§ 6151. Applicability.

25The provisions of this chapter shall apply to:

26(1) Any mortgage loan which is:

27(i) negotiated, offered or otherwise transacted
28within this Commonwealth, in whole or in part, whether by
29the ultimate lender or any other person;

30(ii) made or executed within this Commonwealth; or

1(iii) notwithstanding the place of execution,
2secured by [real property] a dwelling or residential real 
3estate located in this Commonwealth.

4(2) Any person who engages in the mortgage loan business
5in this Commonwealth.

6Section 4. Section 6145 of Title 7 is repealed:

7[§ 6154. Procedure for determination of noncompliance with
8Federal law.

9(a) Applicability.--This section applies if, because of a
10determination under paragraph (4) of the definition of "mortgage
11originator" in section 6102 (relating to definitions), an
12employee:

13(1) is required to be licensed as a mortgage originator
14under state laws implementing the S.A.F.E. Mortgage Licensing
15Act of 2008 (110 Stat. 289, 12 U.S.C. § 5101 et seq.); and

16(2) is thus required to be licensed as a mortgage
17originator.

18(b) Continuation.--An employee specified in subsection (a)
19may continue to act in the employee's current capacity if the
20employee files an application for a mortgage originator license
21with the department within 60 days of the date of the
22determination.]

23Section 5. This act shall take effect in 60 days.