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FOR IMMEDIATE RELEASE
June 27, 2008

House, Senate Approve Mortgage Reform Bills

Senator Browne's legislation would provide protection for consumers

The state House of Representatives today (June 27) approved four bills introduced by Senator Pat Browne (R-16) targeting predatory and other questionable mortgage lending practices in Pennsylvania.

Senate Bills 483, 484, 485 and 486 are now back to the Senate for concurrence on House amendments. The bills are part of a six-bill package introduced by Senator Browne earlier this year.

The provisions of Senator Browne’s other two mortgage reform bills, Senate Bills 487 and 488, were included in House Bill 2179, introduced by Representative Peter Daley (D-49). House Bill 2179 received final Senate approval today and will be returned to the House for concurrence on Senate amendments.

Senate Bill 483 would amend the Loan Interest and Protection Law of 1974 to increase the monetary cap in the Act from $50,000 to $200,000. “The most important protection is eliminating pre-payment penalties for loans $200,000 or less,” said Senator Browne.

Senate Bill 484 would permit the Department of Banking to publicly release information on pending enforcement actions and fines levied against non-depository licensees. 

Senate Bill 485 would amend the Real Estate Appraisers Certification Act regarding board membership, disciplinary measures and penalties.

Senate Bill 486 would amend the Housing Finance Agency Law to require lenders to send copies of foreclosure notices to the Pennsylvania Housing Finance Agency so that mortgage foreclosures can be monitored on a statewide basis.

 “While Pennsylvania has fared better than many states as a result of the collapse of the housing market, we have many, many families suffering as a result of predatory lending and other questionable mortgage practices in the past,” Senator Browne said. “It is incumbent upon us to adjust our banking codes and other codes to try to better protect consumers in one of their most important decisions and that is taking on a mortgage to secure a primary residence.”

HB 2179 would amend the Mortgage Bankers and Brokers and Consumer Equity Protection Act to create a new licensing category for individual mortgage originators who deal directly with the consumer by soliciting, accepting or offering to accept mortgage loan applications or negotiating mortgage loan terms.  The bill includes the same provisions for mortgage originators who deal directly with the consumer by soliciting, accepting or offering to accept secondary mortgage loans (home equity) applications or negotiating secondary mortgage loan terms. 

“Right now mortgage lenders and brokers are licensed, but those who originate the loans and go through paperwork with the consumer and negotiate terms are not,” Senator Browne said.  “This licensing category, which is being considered by other states and the federal government, is an important step to protect consumers. It’s my belief that those in the business of soliciting, advertising and dealing directly with consumers in regards to mortgage loans should be required to have a basic fiduciary responsibility similar to other circumstances where people are licensed to sell financial products in the marketplace.”

Contact:

Lesley Crozier
(717) 787-1349