SUBCHAPTER C

MORTGAGE LOAN BUSINESS RESTRICTIONS AND REQUIREMENTS

 

Sec.

6121.  General requirements.

6122.  Powers conferred on certain licensees engaged in the mortgage loan business.

6123.  Mortgage loan business prohibitions.

6124.  Prohibited clauses in mortgage loan documents.

6125.  Mortgage lending authority.

6126.  Requirements as to open-end loans.

 

Cross References.  Subchapter C is referred to in section 6112 of this title.

§ 6121.  General requirements.

A licensee shall do all of the following:

(1)  Comply with all provisions of the act of January 30, 1974 (P.L.13, No.6), referred to as the Loan Interest and Protection Law (Usury Law). This paragraph shall not supersede section 501 of the Depository Institutions Deregulation and Monetary Control Act of 1980 (94 Stat. 161, 12 U.S.C. § 1735f-7a) or the Alternative Mortgage Transaction Parity Act of 1982 (96 Stat. 1545, 12 U.S.C. §§ 3801-3806 et seq.).

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

(3)  Comply with all applicable Federal law, including the Real Estate Settlement Procedures Act (88 Stat. 1724, 12 U.S.C. §§ 2601 et seq.), the Truth in Lending Act (82 Stat. 146, 15 U.S.C. §§ 1601 et seq.) and the Equal Credit Opportunity Act (88 Stat. 1521, 15 U.S.C. §§ 1691 et seq.).

(4)  Give to the consumer a copy of the promissory note evidencing the mortgage loan and any mortgage loan agreement, mortgage instrument or other document evidencing a mortgage loan signed by the consumer.

(5)  Give to the consumer written evidence of credit life, credit accident and health, credit unemployment and property insurance, if any, provided by the licensee to the consumer.

(6)  If a payment is made in cash on account of a mortgage loan, give to the consumer at the time the payment is actually received a written receipt which shall show the account number or other identification mark or symbol, date, amount paid and, upon request of the consumer, the unpaid balance of the account prior to and after the cash payment.

(7)  Upon written request from the consumer, give or forward to the consumer within ten days from the date of receipt of the request a written statement of the consumer's account which shall show the dates and amounts of all installment payments credited to the consumer's account, the dates, amounts and an explanation of all other charges or credits to the account and the unpaid balance of the account. A licensee shall not be required to furnish more than two statements in any 12-month period.

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

(i)  Cancel any insurance provided by the licensee in connection with the mortgage loan and refund to the consumer, in accordance with regulations promulgated by the Insurance Department, any unearned portion of the premium for the insurance.

(ii)  Stamp or write on the face of the mortgage loan agreement or promissory note evidencing the mortgage loan "Paid in Full" or "Canceled," the date paid and, within 60 days, return the mortgage loan agreement or promissory note to the consumer.

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

(9)  Provide for periodic accounting of any escrow accounts held by the mortgage lender to the consumer not less than annually, showing the amounts received from the consumer and the amounts disbursed from the accounts.

(10)  Refund all fees, other than those fees paid by the licensee to a third party, paid by a consumer when a mortgage loan is not produced within the time specified by the mortgage broker or mortgage lender at the rate, term and overall cost agreed to by the consumer. This paragraph shall not apply if the failure to produce a mortgage loan is due solely to the consumer's negligence, his or her refusal to accept and close on a loan commitment or his or her refusal or inability to provide information necessary for processing, including employment verifications and verifications of deposits. The licensee shall disclose to the consumer, in writing, at the time of a loan application which fees paid or to be paid are nonrefundable.

(11)  As follows:

(i)  Ensure that all lock-in agreements shall be in writing and shall contain at least the following provisions:

(A)  The expiration date of the lock-in, if any.

(B)  The interest rate locked in, if any.

(C)  The discount points locked in, if any.

(D)  The fee locked in, if any.

(E)  The lock-in fee, if any.

(ii)  A licensee who is in compliance with 12 CFR 1026.37 (relating to content of disclosures for certain mortgage transactions (Loan Estimate)) shall satisfy the requirements under this subparagraph.

(iii)  (Deleted by amendment).

(iv)  (Deleted by amendment).

(v)  (Deleted by amendment).

(12)  Upon written request from the consumer or a person authorized by the consumer, provide, within ten days from the date of receipt of the request, a written statement regarding the unpaid balance of a consumer's mortgage loan or account. The statement shall contain the total amount required to pay off a mortgage loan and a specific expiration date for the payoff information. A licensee shall not be required to furnish more than two statements in any 12-month period.

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

(i)  Maintain supervision and control of and responsibility for the acts and omissions of all mortgage originators sponsored by the licensee.

(ii)  Maintain a list of all current and former mortgage originators sponsored by the licensee and the dates of the sponsorship.

(iii)  In the event that a licensee believes that a mortgage originator sponsored by the licensee has engaged in any activity that is illegal or in violation of this chapter or any regulation or statement of policy promulgated under this chapter, the licensee shall provide the department with written notification of the belief and the licensee's proposed corrective measures within 30 days. A licensee shall not be liable to a mortgage originator in connection with the notification.

(14)  In the case of a mortgage originator, clearly display the mortgage originator's unique identifier on all mortgage loan application forms and personal solicitations or advertisements, including business cards.

(15)  For a mortgage servicer, if a mortgage loan is paid in full and, in the case of an open-end mortgage, a mortgage lender is no longer obligated to make future advances to the consumer, the mortgage servicer shall act in good faith to do all of the following:

(i)  Request the mortgage holder release the lien on the dwelling or residential real estate and cancel the same of record and, at the time the mortgage loan agreement or promissory note evidencing the mortgage loan is returned, deliver to the consumer good and sufficient assignment, releases or other certificate, instrument or document as may be necessary to evidence the release.

(ii)  Request the mortgage holder cancel any insurance provided in connection with the mortgage loan and refund to the borrower, in accordance with regulations promulgated by the Insurance Department, any unearned portion of the premium for the insurance.

(iii)  If a mortgage holder has delegated the responsibility to record satisfaction of security instruments to a mortgage servicer, the mortgage servicer shall be treated as a mortgage holder for purposes of satisfying the conditions of subparagraph (i) or (ii).

(Aug. 5, 2009, P.L.117, No.31, eff. imd.; July 2, 2013, P.L.210, No.38, eff. 60 days; Dec. 22, 2017, P.L.1260, No.81; Feb. 3, 2022, P.L.24, No.8, eff. 60 days)

 

2022 Amendment.  Act 8 amended pars. (10), (11) and (13) intro. par.

2017 Amendment.  Act 81 added par. (15). Section 9(2) of Act 81 provided that the amendment of section 6121 shall take effect upon the effective date of regulations promulgated under section 6141 of this title.

2013 Amendment.  Act 38 amended pars. (2), (8) and (13).

2009 Amendment.  Act 31 added par. (14).

Cross References.  Section 6121 is referred to in section 6112 of this title.