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 <-originates or 
29negotiates less than four mortgage loans in a calendar year, 
30unless <-otherwise determined to be engaged in the mortgage 

1loan business by the department.

2(4) Any agency or instrumentality of the Federal
3Government or a corporation otherwise created by an act of
4the United States Congress, including the Federal National
5Mortgage Association, the Government National Mortgage
6Association, the Veterans' Administration, the Federal Home
7Loan Mortgage Corporation and the Federal Housing
8Administration, and employees thereof acting within the scope 
9of their employment. [To qualify for the exception under this 
10paragraph, the agency or instrumentality must ensure 
11employees required to be licensed as mortgage originators 
12have completed the requirements under section 6131.1 
13(relating to prelicensing and continuing education), have 
14obtained the required mortgage originator license and:

15(i) in the same manner as a mortgage lender, obtain
16and maintain bond coverage for mortgage originators
17consistent with section 6131(c)(5) (relating to
18application for license) and file an annual report
19consistent with section 6135(a)(3) (relating to licensee
20requirements); or

21(ii) annually, in a form acceptable to the
22department, demonstrate to the department that all of the
23mortgage originators employed by the agency or
24instrumentality have obtained and maintained the bond
25coverage required by section 6131(f)(4).]

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

1employment. [To qualify for the exception under this 
2paragraph, the agency or instrumentality must ensure 
3employees required to be licensed as mortgage originators 
4have completed the requirements under section 6131.1, have 
5obtained the required mortgage originator license and:

6(i) in the same manner as a mortgage lender, obtain
7and maintain bond coverage for mortgage originators
8consistent with section 6131(c)(5) and file an annual
9report consistent with section 6135(a)(3); or

10(ii) annually, in a form acceptable to the
11department, demonstrate to the department that all of the
12mortgage originators employed by the agency or
13instrumentality have obtained and maintained the bond
14coverage required by section 6131(f)(4).]

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

1of mortgage originators.

2(7) Affiliates of banking institutions and subsidiaries
3and affiliates of federally chartered or State-chartered
4credit unions. The exception under this paragraph does not 
5apply to consumer discount companies. Notwithstanding the 
6exception under this paragraph, subsidiaries and affiliates
7of federally chartered or State-chartered credit unions and 
8affiliates of banking institutions shall:

9(i) be subject to the provisions of Subchapter C and
10sections 6135(a)(2), (3) and (4), (b) and (c), 6138 and
116140(b);

12(ii) deliver as required to the department annually
13copies of financial reports made to all supervisory
14agencies;

15(iii) be registered with the department;

16(iv) in the same manner as a mortgage lender, obtain
17and maintain bond coverage for mortgage originators
18consistent with section 6131(c)(5); and

19(v) ensure employees required to be licensed as
20mortgage originators have completed the requirements
21under section 6131.1 (relating to prelicensing and 
22continuing education) and have obtained the required
23mortgage originator license.

24(8) Employees or individuals under the direct 
25supervision and control of a mortgage broker, mortgage lender
26or mortgage loan correspondent, or a person excepted from 
27licensure under this section, who[:

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

1information, including the use of business cards,
2stationery, brochures, signs, rate lists or other
3promotional items, that they can or will perform any of
4the activities of a mortgage originator; or

5(ii)] are not otherwise required to be licensed as
6mortgage originators.

7(9) Registered mortgage loan originators when acting on 
8behalf of their employers.

9(11) [Nonprofit corporations not otherwise engaged in or
10holding themselves out to the public as being engaged in the
11mortgage loan business making mortgage loans to promote home
12ownership or improvements for the disadvantaged. To qualify 
13for the exception under this paragraph, the nonprofit 
14corporation must ensure employees required to be licensed as 
15mortgage originators have completed the requirements under 
16section 6131.1, have obtained the required mortgage 
17originator license and:

18(i) in the same manner as a mortgage lender, obtain
19and maintain bond coverage for mortgage originators
20consistent with section 6131(c)(5) and file an annual
21report consistent with section 6135(a)(3); or

22(ii) annually, in a form acceptable to the
23department, demonstrate to the department that all of the
24mortgage originators employed by the nonprofit
25corporation have obtained and maintained the bond
26coverage required by section 6131(f)(4).] A bona fide 
27nonprofit organization and employees of the organization 
28acting within the scope of their employment, unless 
29otherwise deemed to be engaged in the mortgage loan 
30business by the department, provided:

1(i) The organization shall be subject to the
2provisions of Subchapter C and sections 6135(a)(2), (3)
3and (4) and (c), 6138 and 6140(b).

4(ii) The organization shall be registered with the
5department.

6(iii) As required under 24 CFR § 3400.103(e)(7)(iii)
7(relating to individuals required to be licensed by
8states), the department must periodically examine the
9books and activities of an organization it determines is
10a bona fide nonprofit organization and revoke its status
11as a bona fide nonprofit organization if it does not
12continue to meet the criteria under 24 CFR §
133400.103(e)(7)(ii).

14(iv) For residential mortgage loans to have terms
15that are favorable to the borrower, the department must
16determine that the terms are consistent with loan
17origination in a public or charitable context, rather
18than a commercial context.

19(v) The department shall make the list of bona fide
20nonprofit organizations available on its Internet
21website.

22[(12) A nonprofit corporation not otherwise engaged in
23or holding itself out to the public as being engaged in the
24mortgage loan business which meets all of the following
25subparagraphs:

26(i) Does not make more than 12 mortgage loans in a
27calendar year with its own funds, not including funds
28borrowed through warehouse lines of credit or other
29sources for the purpose of making mortgage loans.

30(ii) Makes mortgage loans which are retained in the

1corporation's own portfolios and not regularly sold to
2others and are made to promote and advance the cultural
3traditions and lifestyles of bona fide religious
4organizations.

5(iii) Does either of the following:

6(A) In the same manner as a mortgage lender,
7obtains and maintains bond coverage for mortgage
8originators consistent with section 6131(c)(5) and
9files an annual report consistent with section
106135(a)(3).

11(B) Annually, in a form acceptable to the
12department, demonstrates to the department that all
13of the mortgage originators employed by the nonprofit
14corporation have obtained and maintained the bond
15coverage required by section 6131(f)(4).

16(iv) Ensures employees required to be licensed as
17mortgage originators have completed the requirements
18under section 6131.1 and have obtained the required
19mortgage originator license.]

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

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

1Finance Act.

2(ii) Be registered with the department.

3(iii) Do either of the following:

4(A) In the same manner as a mortgage lender or
5mortgage broker, as applicable depending upon whether
6the installment seller or holder makes or brokers
7installment sales contracts secured by manufactured
8homes that are purchase-money mortgage loans, obtain
9and maintain bond coverage for mortgage originators
10consistent with section 6131(c)(5) or (e)(3) and file
11[an annual] a periodic report consistent with section
126135(a)(3); or

13(B) Annually demonstrate to the department that
14the mortgage originators employed by, or under the 
15direct supervision and control of, the installment
16seller or holder have obtained and maintained the
17bond coverage required by section 6131(f)(4) in a
18form acceptable to the department.

19(iv) Ensure employees or individuals under the 
20direct supervision and control of the installment seller 
21or holder required to be licensed as mortgage originators
22have completed the requirements under section 6131.1 and
23have obtained the required mortgage originator license.

24(14) A nonoriginating person, unless otherwise deemed to
25be engaged in the mortgage loan business by the department,
26except that the nonoriginating person shall:

27(i) Be subject to the provisions of Subchapter C and
28sections 6135(a)(2), (3) and (4) and (c), 6138 and
296140(b).

30(ii) Be registered with the department.

1(iii) In the same manner as a mortgage broker,
2obtain and maintain bond coverage for mortgage
3originators consistent with section 6131(c)(5).

4(iv) Ensure employees or individuals under the
5direct supervision and control of the person required to
6be licensed as mortgage originators have completed the
7requirements under section 6131.1 and have obtained the
8required mortgage originator license.

9(15) Notwithstanding section 6151 (relating to
10applicability), a mortgage originator licensed by one or more
11other states and physically located in this Commonwealth that
12does not engage in any transactions involving Pennsylvania
13consumers, dwellings or residential real estate.

14(16) A person who engages in mortgage loan modifications
15for existing mortgage loans held or serviced by that person
16or that person's employer and who does not otherwise engage
17in the mortgage loan business.

18§ 6121. General requirements.

19A licensee shall do all of the following:

20* * *

21(2) Comply with all applicable State law, including the
22provisions of the act of December 3, 1959 (P.L.1688, No.621),
23known as the Housing Finance Agency Law, that are applicable
24to the licensee and the act of December 9, 2002 (P.L.1530, 
25No.197), known as the Mortgage Satisfaction Act.

26* * *

27(8) If a mortgage loan is paid in full and, in the case
28of an open-end loan, the mortgage lender is no longer
29obligated to make future advances to the consumer, the
30mortgage lender shall do all of the following:

1(i) Cancel any insurance provided by the licensee in
2connection with the mortgage loan and refund to the
3consumer, in accordance with regulations promulgated by
4the Insurance Department, any unearned portion of the
5premium for the insurance.

6(ii) Stamp or write on the face of the mortgage loan
7agreement or promissory note evidencing the mortgage loan
8"Paid in Full" or "Canceled," the date paid and, within
960 days, return the mortgage loan agreement or promissory
10note to the consumer.

11(iii) Release any lien on [real property] the 
12dwelling or residential real estate and cancel the same
13of record and, at the time the mortgage loan agreement or
14promissory note evidencing the mortgage loan is returned,
15deliver to the consumer good and sufficient assignments,
16releases or any other certificate, instrument or document
17as may be necessary to evidence the release.

18* * *

19(13) In the case of a mortgage broker, mortgage lender or
20mortgage loan correspondent, do all of the following:

21(i) Maintain supervision and control of and
22responsibility for the acts and omissions of all mortgage
23originators [employed] sponsored by the licensee.

24(ii) Maintain a list of all current and former
25mortgage originators [employed] sponsored by the licensee
26and the dates of the [employment] sponsorship.

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

1of policy promulgated under this chapter, the licensee
2shall provide the department with written notification of
3the belief and the licensee's proposed corrective
4measures within 30 days. A licensee shall not be liable
5to a mortgage originator in connection with the
6notification.

7* * *

8Section 2. Section 6123(8) of Title 7 is amended and the
9section is amended by adding a paragraph to read:

10§ 6123. Mortgage loan business prohibitions.

11A licensee engaging in the mortgage loan business shall not:

12* * *

13(8) In the case of a mortgage originator, accept any
14fees from consumers in the mortgage originator's own name. A
15mortgage originator may accept fees payable to the mortgage
16originator's [employer] sponsoring licensee and fees payable
17to third-party entities on behalf of the mortgage
18originator's [employer] sponsoring licensee. A mortgage
19originator may not accept advance fees payable to the
20mortgage originator's [employer] sponsoring licensee unless
21the licensee is authorized to collect advance fees under this
22chapter.

23(9) In the case of a mortgage originator, engage in the
24mortgage loan business other than on behalf of the single
25mortgage broker, mortgage lender or mortgage loan
26correspondent or a person excepted from this chapter or a
27person excepted from licensure under section 6112 (relating
28to exceptions to license requirements) that sponsors the
29mortgage originator.

30Section 3. Sections 6126(7), 6131, 6131.1(b), (c) and (d),

16135(a) and (b), 6136(a), 6137, 6138(b), (d), (e) and (f),
26139(a), 6140(b) and 6151 of the title are amended to read:

3§ 6126. Requirements as to open-end loans.

4The following shall apply:

5* * *

6(7) Notwithstanding any other provisions in this chapter
7to the contrary, a mortgage lender may retain any security
8interest in a dwelling or real or personal property until the
9open-end loan is terminated, provided that, if there is no
10outstanding balance in the account and there is no commitment
11by the licensee to make advances, the mortgage lender shall,
12within ten days following written demand by the consumer,
13deliver to the consumer a release of the mortgage, indenture,
14deed of trust or any other similar instrument or document on
15any [real property] dwelling or residential real estate taken
16as security for the open-end loan. The mortgage lender shall
17include on all billing statements provided in connection with
18an open-end loan a statement that the licensee retains a
19security interest in the consumer's [real property] dwelling 
20or residential real estate whenever the security interest has
21not been released.

22* * *

23§ 6131. Application for license.

24(a) Contents.--An application for a license under this
25chapter shall be on a form prescribed and provided by the
26department. Consistent with sections 202 E and 405 F(1) of the
27act of May 15, 1933 (P.L.565, No.111), known as the Department
28of Banking and Securities Code, all applicants and licensees
29shall use the Nationwide Mortgage Licensing System and Registry
30to obtain and maintain licenses under this chapter.

1(1) In the case of a mortgage broker, mortgage lender or
2mortgage loan correspondent, the application shall include
3the following:

4(i) The name of the applicant.

5(ii) The address of the principal place of business
6and any branches of the applicant [and the address or
7addresses where the applicant's mortgage loan business is
8to be conducted].

9(iii) The full name, official title and business
10address of each director and principal officer of the
11mortgage loan business.

12(iv) Any other information that may be required by
13the department.

14(2) In the case of a mortgage originator, the
15application shall include the following:

16(i) The name of the applicant.

17(ii) The name of the [employer licensee] sponsoring 
18licensee or excepted person of the applicant and location
19of the [employer licensee] excepted person or licensed 
20location of the licensee to which the applicant is
21assigned.

22(iii) Any other information that may be required by
23the department.

24(3) An applicant shall demonstrate to the department
25that policies and procedures have been developed to receive
26and process consumer inquiries and grievances promptly and
27fairly.

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

1and each branch.

2(b) Duty to update.--All applicants and licensees shall be
3required to provide the department with written notice of the
4change in any information contained in an application for a
5license or for any renewal of a license within ten days of an
6applicant or licensee becoming aware of the change.

7(c) Mortgage lender license.--The department shall issue a
8mortgage lender license applied for under this chapter if the
9applicant has:

10[(1) Been approved by or meets the current criteria for
11approval of at least one of the following:

12(i) Federal National Mortgage Association.

13(ii) Federal Home Loan Mortgage Corporation.

14(iii) Federal Housing Administration.]

15(2) Been approved for and will continue to maintain as a
16licensee a line of credit, repurchase agreement or equivalent
17mortgage-funding capability of not less than $1,000,000.

18(3) Established a minimum net worth of $250,000 at the
19time of application and will, at all times thereafter,
20maintain the minimum net worth.

21(4) Been approved for and will continue to maintain as a
22licensee fidelity bond coverage in accordance with the
23guidelines established by the Federal National Mortgage
24Association or the Federal Home Loan Mortgage Corporation.

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

1apply:

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

3(A) $100,000 for an applicant or licensee whose
4mortgage originators will originate or originated
5less than $30,000,000 in mortgage loans secured by
6Pennsylvania [real property] dwellings or residential 
7real estate in a calendar year;

8(B) $200,000 for an applicant or licensee whose
9mortgage originators will originate or originated
10$30,000,000 to $99,999,999.99 in mortgage loans
11secured by Pennsylvania [real property] dwellings or 
12residential real estate in a calendar year;

13(C) $300,000 for an applicant or licensee whose
14mortgage originators will originate or originated
15$100,000,000 to $249,999,999.99 in mortgage loans
16secured by Pennsylvania [real property] dwellings or 
17residential real estate in a calendar year; and

18(D) $500,000 for an applicant or licensee whose
19mortgage originators will originate or originated
20$250,000,000 or more in mortgage loans secured by
21Pennsylvania [real property] dwellings or residential 
22real estate in a calendar year.

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

1Pennsylvania dwellings or residential real estate
2originated by the licensee's mortgage originators as
3indicated on the licensee's [annual] periodic report.

4(iii) The bond shall run to the Commonwealth and
5shall be for the use of the Commonwealth and for the use
6of any consumer who is injured by the acts or omissions
7of the licensee's mortgage originators that are related
8to the mortgage loan business regulated by this chapter.
9No bond shall comply with the requirements of this
10section unless it contains a provision that it shall not
11be canceled for any cause unless notice of intention to
12cancel is given to the department at least 30 days before
13the day upon which cancellation shall take effect.
14Cancellation of the bond shall not invalidate the bond
15regarding the period of time it was in effect.

16(6) Designated an individual as the qualifying
17individual for the principal place of business and separate
18individuals as branch managers for each branch, as
19applicable.

20(d) Mortgage loan correspondent license.--The department
21shall issue a loan correspondent's license applied for under
22this chapter if the applicant:

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

1bond shall comply with the requirements of this section
2unless it contains a provision that it shall not be canceled
3for any cause unless notice of intention to cancel is given
4to the department at least 30 days before the day upon which
5cancellation shall take effect. A mortgage loan correspondent
6who can demonstrate to the satisfaction of the department
7that the correspondent does not and will not accept advance
8fees shall be exempt from the bond requirement of this
9paragraph.

10(2) Establishes a minimum net worth of $100,000 at the
11time of application and will, at all times thereafter,
12maintain the minimum net worth.

13(3) Obtains and will maintain a surety bond in an amount
14that will provide coverage for the mortgage originators
15[employed] sponsored by the applicant or licensee, in a form
16acceptable to the department, prior to the issuance of the
17license, from a surety company authorized to do business in
18this Commonwealth. The following shall apply:

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

1real estate in a calendar year; and $500,000 for an
2applicant or licensee whose mortgage originators will
3originate or originated $250,000,000 or more in mortgage
4loans secured by Pennsylvania dwellings or residential
5real estate in a calendar year.

6(ii) For an initial license applicant, the amount of
7the bond shall be determined by the applicant's
8anticipated amount of mortgage loans secured by
9Pennsylvania dwellings or residential real estate
10originated by its mortgage originators in the first
11calendar year of licensing. For a licensee, the amount of
12the bond shall be determined annually by the department
13based upon the amount of mortgage loans secured by
14Pennsylvania dwellings or residential real estate
15originated by the licensee's mortgage originators as
16indicated on the licensee's [annual] periodic report.

17(iii) The bond shall run to the Commonwealth and
18shall be for the use of the Commonwealth and for the use
19of any consumer who is injured by the acts or omissions
20of the licensee's mortgage originators that are related
21to the mortgage loan business regulated by this chapter.
22No bond shall comply with the requirements of this
23section unless it contains a provision that it shall not
24be canceled for any cause unless notice of intention to
25cancel is given to the department at least 30 days before
26the day upon which cancellation shall take effect.
27Cancellation of the bond shall not invalidate the bond
28regarding the period of time it was in effect.

29(4) Designates an individual as the qualifying
30individual for the principal place of business and separate

1individuals as branch managers for each branch, as
2applicable.

3(e) Mortgage broker license.--

4(1) The department shall issue a mortgage broker license
5applied for under this chapter if the applicant obtains and
6will maintain a bond in the amount of $100,000, in a form
7acceptable to the department, prior to the issuance of the
8license, from a surety company authorized to do business in
9this Commonwealth. The bond shall be a penal bond conditioned
10on compliance with this chapter and subject to forfeiture by
11the department and shall run to the Commonwealth for its use.
12The bond shall also be for the use of any person against the
13mortgage broker for failure to carry out the terms of any
14provision for which advance fees are paid. If the person is
15aggrieved, the person may, with the written consent of the
16department, recover advance fees and costs from the bond by
17filing a claim with the surety company or maintaining an
18action on the bond. In the alternative, an aggrieved person
19may recover advance fees and costs by filing a formal
20complaint against the mortgage broker with the department
21which shall adjudicate the matter. The adjudication shall be
22binding upon the surety company and enforceable by the
23department in Commonwealth Court and by an aggrieved person
24in any court. Any aggrieved person seeking to recover advance
25fees and costs from a bond that has already been forfeited by
26the department or which the department is in the process of
27forfeiting may recover payment on the bond if, after filing a
28petition with the department, the department consents to the
29aggrieved person's requested payment or portion thereof. The
30department may pay the aggrieved person from the bond

1proceeds it recovers. Nothing in this section shall be
2construed as limiting the ability of any court or magisterial
3district judge to award to any aggrieved person other
4damages, court costs and attorney fees as permitted by law,
5but those claims that are not advance fees or related costs
6may not be recovered from the bond. The department, in its
7discretion, may consent to or order pro rata or other
8recovery on the bond for any aggrieved person if claims
9against the bond may or do exceed its full monetary amount.
10No bond shall comply with the requirements of this section
11unless it contains a provision that it shall not be canceled
12for any cause unless notice of intention to cancel is given
13to the department at least 30 days before the day upon which
14cancellation shall take effect. Cancellation of the bond
15shall not invalidate the bond regarding the period of time it
16was in effect.

17(2) Mortgage brokers who can demonstrate to the
18satisfaction of the department that they do not and will not
19accept advance fees shall be exempt from the bond requirement
20of paragraph (1).

21(3) A mortgage broker shall obtain and maintain a surety
22bond in an amount that will provide coverage for the mortgage
23originators [employed] sponsored by the applicant or
24licensee, in a form acceptable to the department, prior to
25the issuance of the license, from a surety company authorized
26to do business in this Commonwealth. The following shall
27apply:

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

1loans secured by Pennsylvania dwellings or residential
2real estate in a calendar year; $75,000 for an applicant
3or licensee whose mortgage originators will originate or
4originated $15,000,000 to $29,999,999.99 in mortgage
5loans secured by Pennsylvania dwellings or residential
6real estate in a calendar year; $100,000 for an applicant
7or licensee whose mortgage originators will originate or
8originated $30,000,000 to $49,999,999.99 in mortgage
9loans secured by Pennsylvania dwellings or residential
10real estate in a calendar year; and $150,000 for an
11applicant or licensee whose mortgage originators will
12originate or originated $50,000,000 or more in mortgage
13loans secured by Pennsylvania dwellings or residential
14real estate in a calendar year.

15(ii) For an initial license applicant, the amount of
16the bond shall be determined by the applicant's
17anticipated amount of mortgage loans secured by
18Pennsylvania dwellings or residential real estate
19originated by its mortgage originators in the first
20calendar year of licensing. For a licensee, the amount of
21the bond shall be determined annually by the department
22based upon the amount of mortgage loans secured by
23Pennsylvania dwellings or residential real estate
24originated by the licensee's mortgage originators as
25indicated on the licensee's [annual] periodic report.

26(iii) The bond shall run to the Commonwealth and
27shall be for the use of the Commonwealth and for the use
28of any consumer who is injured by the acts or omissions
29of the licensee's mortgage originators that are related
30to the mortgage loan business regulated by this chapter.

1No bond shall comply with the requirements of this
2section unless it contains a provision that it shall not
3be canceled for any cause unless notice of intention to
4cancel is given to the department at least 30 days before
5the day upon which cancellation shall take effect.
6Cancellation of the bond shall not invalidate the bond
7regarding the period of time it was in effect.

8(4) A mortgage broker shall designate an individual as
9the qualifying individual for the principal place of business
10and separate individuals as branch managers for each branch,
11as applicable.

12(f) Mortgage originator license.--A mortgage originator
13shall do all of the following:

14(1) Be an employee of [a single], or under the direct 
15supervision and control of, a licensed mortgage broker,
16mortgage lender or mortgage loan correspondent, a person
17excepted from this chapter or a person excepted from
18licensure under section 6112 (relating to exceptions to
19license requirements). The licensee or person shall sponsor 
20the mortgage originator in the Nationwide Mortgage Licensing 
21System and Registry and directly supervise, control and
22maintain responsibility for the acts and omissions of the
23mortgage originator.

24(2) Be assigned to and work out of a licensed location
25of the [employer] sponsoring licensee or a location of [an
26employer] a sponsoring person excepted from this chapter or
27excepted from licensure under section 6112[.], which, in the 
28case of a sponsoring licensee, may be either the mortgage 
29originator's residence or a location of the licensee that is 
30within 100 miles of the mortgage originator's residence.

1(3) Maintain a valid unique identifier issued by the
2Nationwide Mortgage Licensing System and Registry.

3(4) If a person excepted from this chapter or excepted
4from licensure under section 6112 does not elect to maintain
5bond coverage for its mortgage originators in the same manner
6as a mortgage lender, a mortgage originator employed by or 
7under the direct supervision and control of a person excepted
8from this chapter or excepted from licensure under section
96112 shall obtain and maintain a surety bond in an amount
10that will provide coverage for the mortgage originator, in a
11form acceptable to the department, prior to the issuance of
12the license, from a surety company authorized to do business
13in this Commonwealth. The following shall apply:

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

1loans secured by Pennsylvania dwellings or residential
2real estate in a calendar year.

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

14(iii) The bond shall run to the Commonwealth and
15shall be for the use of the Commonwealth and for the use
16of any consumer who is injured by the acts or omissions
17of the mortgage originator that are related to the
18mortgage loan business regulated by this chapter. No bond
19shall comply with the requirements of this section unless
20it contains a provision that it shall not be canceled for
21any cause unless notice of intention to cancel is given
22to the department at least 30 days before the day upon
23which cancellation shall take effect. Cancellation of the
24bond shall not invalidate the bond regarding the period
25of time it was in effect.

26(5) Only engage in the mortgage loan business on behalf
27of the single mortgage broker, mortgage lender or mortgage
28loan correspondent or a person excepted from this chapter or
29a person excepted from licensure under section 6112 that
30sponsors the mortgage originator.

1(g) Nationwide Mortgage Licensing System and Registry
2information challenge process.--A mortgage originator applicant
3or licensee may challenge the accuracy of information entered by
4the department to the Nationwide Mortgage Licensing System and
5Registry regarding the mortgage originator applicant or licensee
6by filing a written complaint with the department. The
7department shall review the complaint and alleged inaccurate
8information on the Nationwide Mortgage Licensing System and
9Registry and notify the applicant or licensee of corrective
10action taken by the department regarding the alleged inaccurate
11information within 30 days of receipt of the complaint.

12(h) License renewals.--Licenses shall be issued for terms
13[of 12] not to exceed 14 months and may be renewed by the
14department each year on a schedule set by the department upon
15application by the licensee and the payment of any and all
16applicable renewal fees. The licensee shall demonstrate to the
17department that it is conducting the mortgage loan business in
18accordance with the requirements of this chapter and that the
19licensee or directors, officers, partners, employees, mortgage 
20originators, agents and ultimate equitable owners of 10% or more
21of the licensee continue to meet all of the initial requirements
22for licensure required by this chapter unless otherwise
23determined by the department.

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

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

1at least one office which is the office that shall be
2licensed as the principal place of business for the purposes
3of this chapter.

4(2) Out-of-State applicants shall file with the license
5application an irrevocable consent, duly acknowledged, that
6suits and actions may be commenced against that person in the
7courts of this Commonwealth by the service of process of any
8pleading upon the department in the usual manner provided for
9service of process and pleadings by the laws and court rules
10of this Commonwealth. The consent shall provide that this
11service shall be as valid and binding as if service had been
12made personally upon the person in this Commonwealth. In all
13cases where process or pleadings are served upon the
14department under the provisions of this section, the process
15or pleadings shall be served in triplicate; one copy shall be
16filed in the department's offices and the others shall be
17forwarded by the department, by certified or registered mail,
18return receipt requested, to the last known principal place
19of business of the person.

20(j) Disclosure of mortgage originator information.--
21Notwithstanding section 302 of the act of May 15, 1933 (P.L.565,
22No.111), known as the Department of Banking and Securities Code,
23the department shall make available to the public, including by
24access to the Nationwide Mortgage Licensing System and Registry,
25the employment history of a mortgage originator.

26§ 6131.1. Prelicensing and continuing education.

27* * *

28(b) Prelicensing education.--

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

1applicant other than a mortgage originator] qualifying 
2individual of a mortgage broker, mortgage lender or mortgage 
3loan correspondent applicant, shall complete at least 20 
4hours of education programs approved in accordance with 
5paragraph (2), which shall include all of the following:

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

7(ii) Three hours of ethics, which shall include
8instruction on fraud, consumer protection and fair
9lending issues.

10(iii) Two hours of training related to lending
11standards for the nontraditional mortgage loan
12marketplace.

13(iv) Three hours of Pennsylvania law and
14regulations, including this chapter, the act of December
153, 1959 (P.L.1688, No.621), known as the Housing Finance
16Agency Law, and the act of January 30, 1974 (P.L.13,
17No.6), referred to as the Loan Interest and Protection
18Law.

19(2) Prelicensing education programs shall be reviewed
20and approved by the Nationwide Mortgage Licensing System and
21Registry or as otherwise determined by the department based
22upon reasonable standards. Review and approval of a
23prelicensing education program shall include review and
24approval of the program provider.

25(3) A prelicensing education program approved by the
26Nationwide Mortgage Licensing System and Registry or as
27otherwise determined by the department may be provided by the
28[employer] sponsor of the applicant or an entity which is
29affiliated with the applicant by an agency contract, or any
30subsidiary or affiliate of such [employer] sponsor or entity.

1(4) Prelicensing education programs may be offered
2either in a classroom, online or by any other means approved
3by the Nationwide Mortgage Licensing System and Registry or
4as otherwise determined by the department.

5(5) Except for prelicensing education programs under
6paragraph (1)(iv), prelicensing education programs approved
7by the Nationwide Mortgage Licensing System and Registry or
8as otherwise determined by the department and completed for
9another State license application shall be accepted as credit
10toward completion of the prelicensing education requirements
11of this chapter [if the education programs have been
12successfully completed within the 12 months immediately
13preceding the date of the submission of the applicant's
14license application].

15(6) An applicant that was previously licensed under this
16chapter that is applying to become licensed again under this
17chapter must demonstrate that the applicant has completed all
18of the continuing education requirements for the year in
19which the applicant was last licensed under this chapter.

20(c) Prelicensing written test.--

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

1the] department may also require applicants to pass a test 
2regarding Pennsylvania-specific law, which shall be 
3administered by a test provider approved by the department or 
4as otherwise determined by the department under subsection 
5(e).

6(2) A written test shall not be treated as a qualified
7written test for purposes of paragraph (1) unless the test
8adequately measures the applicant's knowledge and
9comprehension in appropriate subject areas, including:

10(i) Ethics.

11(ii) Federal law and regulation pertaining to
12mortgage origination.

13(iii) Pennsylvania law and regulation pertaining to
14mortgage origination, unless otherwise determined by the 
15department.

16(iv) Federal and Pennsylvania law and regulation
17related to fraud, consumer protection, the nontraditional
18mortgage marketplace and fair lending issues.

19(3) A test provider approved by the Nationwide Mortgage
20Licensing System and Registry or as otherwise determined by
21the department may provide a test at the location of the
22[employer] sponsor of the applicant or an entity which is
23affiliated with the applicant by an agency contract, or any
24subsidiary or affiliate of the [employer] sponsor or entity.

25(4) (i) An applicant shall not be considered to have
26passed a qualified written test unless the individual
27achieves a test score of not less than 75% correct
28answers to questions.

29(ii) An applicant may [retake] take a test three
30consecutive times with each consecutive taking occurring

1at least 30 days after the preceding test.

2(iii) After failing three consecutive tests, an
3applicant shall wait at least six months before taking
4the test again.

5(iv) A formerly licensed mortgage originator
6applicant who has been unlicensed for five continuous
7years or longer shall retake a test. Any time during
8which the individual is a registered mortgage loan
9originator shall not be counted toward the five-year
10continuous period.

11(d) Continuing education.--

12(1) A licensee who is a mortgage originator and [one 
13individual from each licensed office] all branch managers and 
14qualifying individuals of a mortgage broker, mortgage lender 
15or mortgage loan correspondent [that is not a mortgage 
16originator, unless all of the nonclerical staff of a 
17particular licensed office are licensed as mortgage 
18originators,] shall annually complete at least eight hours of 
19education programs in accordance with paragraph (2), which 
20shall include all of the following:

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

22(ii) Two hours of ethics, which shall include
23instruction on fraud, consumer protection and fair
24lending issues.

25(iii) Two hours of training related to lending
26standards for the nontraditional mortgage loan
27marketplace.

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

1January 30, 1974 (P.L.13, No.6), referred to as the Loan
2Interest and Protection Law.

3(2) Continuing education programs shall be reviewed and
4approved by the Nationwide Mortgage Licensing System and
5Registry or as otherwise determined by the department based
6upon reasonable standards. Review and approval of a
7continuing education program shall include review and
8approval of the program provider.

9(3) A continuing education program approved by the
10Nationwide Mortgage Licensing System and Registry or as
11otherwise determined by the department may be provided by the
12[employer] sponsor of the licensee or an entity which is
13affiliated with the licensee by an agency contract, or any
14subsidiary or affiliate of the [employer] sponsor or entity.

15(4) Continuing education programs may be offered either
16in a classroom, online or by any other means approved by the
17Nationwide Mortgage Licensing System and Registry or as
18otherwise determined by the department.

19(5) A licensee may only receive credit for a continuing
20education program in the year in which the program is taken
21and may not take the same continuing education program in the
22same or successive years to meet the requirements of this
23subsection.

24(6) A licensed mortgage originator who is an instructor
25of an approved continuing education program may receive
26credit for the licensed mortgage loan originator's own
27continuing education requirement at the rate of two hours
28credit for every one hour taught.

29(7) Except for the continuing education program under
30paragraph (1)(iv), continuing education programs approved by

1the Nationwide Mortgage Licensing System and Registry or as
2otherwise determined by the department and completed for
3another state shall be accepted as credit toward completion
4of the continuing education requirements of this chapter.

5(8) An individual who is a mortgage originator, branch
6manager or qualifying individual of a mortgage broker,
7mortgage lender or mortgage loan correspondent is not
8required to complete the requirements of this subsection in
9any licensing year in which the individual has completed the
10requirements of subsection (b).

11* * *

12§ 6135. Licensee requirements.

13(a) Requirements of licensee.--

14[(1) A licensee who is a mortgage broker, mortgage
15lender or mortgage loan correspondent shall conspicuously
16display, at each licensed place of business, its license and
17copies of the licenses of all mortgage originators assigned
18to that location. A licensee who is a mortgage originator
19shall keep the license in the immediate possession of the
20licensee whenever the licensee is engaged in the mortgage
21loan business.]

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

1under this chapter. All instruments, documents, accounts, 
2books and records relating to the mortgage loan business 
3shall be kept separate and apart from the records of any 
4other business conducted by the licensee. Records of first 
5and secondary mortgage loans shall be easily distinguishable 
6and easily separated. All records shall be preserved and kept 
7available for investigation or examination by the department 
8for a period of four years, unless otherwise determined by 
9the department. The department shall have free access to and
10authorization to examine records maintained by the licensee.
11The costs of the examination, including travel costs, shall
12be borne by the licensee. The department may deny or revoke
13the authority to maintain records at another place for good
14cause in the interest of protection for Commonwealth
15consumers, including for the licensee's failure to provide
16books, accounts, records or documents to the department upon
17request.

18(3) A mortgage broker, mortgage lender or mortgage loan
19correspondent, or a mortgage originator that is required to 
20obtain and maintain its own bond coverage under section 
216131(f)(4) (relating to application for license), [on a date
22determined by the department,] shall file periodically, as 
23determined by the department, a report with the department or 
24the Nationwide Mortgage Licensing System and Registry, as 
25determined by the department, setting forth such information
26as the department shall require concerning the first or
27secondary mortgage loan business conducted by the licensee
28[during the preceding calendar year. The report shall be on a
29form provided by the department and shall be filed with the 
30Nationwide Mortgage Licensing System and Registry]. Licensees

1who fail to file the required report at the date required by
2the department may be subject to a penalty of $100 for each
3day after the due date until the report is filed.

4(4) Each licensee shall be subject to examination by the
5department at its discretion, at which time the department
6shall have free access, during regular business hours, to the
7licensee's place or places of business and to all
8instruments, documents, accounts, books and records which
9pertain to a licensee's first or secondary mortgage loan
10business. The department may examine a licensee at any time
11if the department deems the examination to be necessary or
12desirable. The cost of any such examination shall be borne by
13the licensee.

14(5) Each licensee shall include in all advertisements
15[language indicating that the licensee is licensed by the
16department. In the case of a mortgage originator, all
17advertising shall include the name of the mortgage
18originator's employer and the mortgage originator's unique 
19identifier] the licensee's unique identifier.

20(b) Accounting records.--[The] For licensees with minimum 
21net worth requirements pursuant to this chapter, the licensee's
22accounting records must be constructed and maintained in
23compliance with generally accepted accounting principles or as
24provided by department regulation.

25* * *

26§ 6136. Licensee limitations.

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

1originator's personal legal name. A licensee that changes its
2name or place or places of business shall notify the department
3or the Nationwide Mortgage Licensing System and Registry, as 
4determined by the department, within ten days of the change[,
5and the department shall issue a certificate to the licensee, if
6appropriate, which shall specify the licensee's new name or
7address].

8* * *

9§ 6137. Surrender of license.

10Upon satisfying the department that all creditors of a
11licensee have been paid or that other arrangements satisfactory
12to the creditors and the department have been made, a licensee
13may voluntarily surrender its license to the department by
14[delivering its license to the department with] providing the 
15department or the Nationwide Mortgage Licensing System and 
16Registry, as determined by the department, written notice that
17the license is being voluntarily surrendered, but an action by a
18licensee shall not affect the licensee's civil or criminal
19liability for acts committed.

20§ 6138. Authority of department.

21* * *

22(b) Hearings.--A person aggrieved by a decision of the
23department may appeal the decision of the department to the
24[Secretary of Banking] commission. The appeal shall be conducted
25under 2 Pa.C.S. Ch. 5 Subch. A (relating to practice and
26procedure of Commonwealth agencies).

27* * *

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

1court of competent jurisdiction. The department may publish
2final adjudications issued under this section, subject to
3redaction or modification to preserve confidentiality. The 
4department shall regularly report violations of this chapter, 
5enforcement actions and other relevant information to the 
6Nationwide Mortgage Licensing System and Registry.

7(e) Appeals.--A person aggrieved by a decision of the
8[Secretary of Banking] commission may appeal the decision under
92 Pa.C.S. Ch. 7 Subch. A. (relating to judicial review of
10Commonwealth agency action).

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

14§ 6139. Suspension, revocation or refusal.

15(a) Departmental action.--The department may suspend, revoke
16or refuse to renew a license issued under this chapter if any
17fact or condition exists or is discovered which, if it had
18existed or had been discovered at the time of filing of the
19application for the license, would have warranted the department
20in refusing to issue the license or if a licensee or director,
21officer, partner, employee, mortgage originator or owner of a
22licensee has:

23(1) Made a material misstatement in an application or
24any report or submission required by this chapter or any
25department regulation, statement of policy or order.

26(2) Failed to comply with or violated any provision of
27this chapter or any regulation or order promulgated or issued
28by the department under this chapter.

29(3) Engaged in dishonest, fraudulent or illegal
30practices or conduct in a business or unfair or unethical

1practices or conduct in connection with the mortgage loan
2business.

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

5(5) Permanently or temporarily been enjoined by a court
6of competent jurisdiction from engaging in or continuing
7conduct or a practice involving an aspect of the mortgage
8loan business.

9(6) Become the subject of an order of the department
10denying, suspending or revoking a license applied for or
11issued under this chapter.

12(7) Become the subject of a United States Postal Service
13fraud order.

14(8) Failed to comply with the requirements of this
15chapter to make and keep records prescribed by regulation,
16statement of policy or order of the department, to produce
17records required by the department or to file financial
18reports or other information that the department by
19regulation, statement of policy or order may require.

20(9) Become the subject of an order of the department
21denying, suspending or revoking a license under the
22provisions of any other law administered by the department.

23(10) Demonstrated negligence or incompetence in
24performing an act for which the licensee is required to hold
25a license under this chapter.

26(11) Accepted an advance fee without having obtained the
27bond required by section 6131(d)(1) or (e)(1) (relating to
28application for license).

29(12) Become insolvent, meaning that the liabilities of
30the applicant or licensee exceed the assets of the applicant

1or licensee or that the applicant or licensee cannot meet the
2obligations of the applicant or licensee as they mature or is
3in such financial condition that the applicant or licensee
4cannot continue in business with safety to the customers of
5the applicant or licensee.

6(13) Failed to complete the requirements of section 
76131.1 (relating to prelicensing and continuing education).

8(14) In the case of a mortgage broker, mortgage lender
9or mortgage loan correspondent, conducted the mortgage loan
10business through an unlicensed mortgage originator.

11(15) Failed to comply with the terms of any agreement
12under which the department authorizes a licensee to maintain
13records at a place other than the licensee's principal place
14of business.

15* * *

16§ 6140. Penalties.

17* * *

18(b) Violation by licensee.--A person licensed under this
19chapter or director, officer, owner, partner, employee, mortgage 
20originator or agent of a licensee who violates a provision of
21this chapter or who commits any action which would subject the
22licensee to suspension, revocation or nonrenewal under section
236139 may be fined by the department up to $10,000 for each
24offense.

25§ 6151. Applicability.

26The provisions of this chapter shall apply to:

27(1) Any mortgage loan which is:

28(i) negotiated, offered or otherwise transacted
29within this Commonwealth, in whole or in part, whether by
30the ultimate lender or any other person;

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

2(iii) notwithstanding the place of execution,
3secured by [real property] a dwelling or residential real 
4estate located in this Commonwealth.

5(2) Any person who engages in the mortgage loan business
6in this Commonwealth.

7Section 4. Section 6145 6154 <-of Title 7 is repealed:

8[§ 6154. Procedure for determination of noncompliance with
9Federal law.

10(a) Applicability.--This section applies if, because of a
11determination under paragraph (4) of the definition of "mortgage
12originator" in section 6102 (relating to definitions), an
13employee:

14(1) is required to be licensed as a mortgage originator
15under state laws implementing the S.A.F.E. Mortgage Licensing
16Act of 2008 (110 Stat. 289, 12 U.S.C. § 5101 et seq.); and

17(2) is thus required to be licensed as a mortgage
18originator.

19(b) Continuation.--An employee specified in subsection (a)
20may continue to act in the employee's current capacity if the
21employee files an application for a mortgage originator license
22with the department within 60 days of the date of the
23determination.]

24Section 5. This act shall take effect in 60 days.