FOR IMMEDIATE RELEASE
March 11, 2008
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Senate Approves Mortgage Reform Package Co-Sponsored by Erickson

Harrisburg -- The state Senate today approved six bills targeting predatory and other questionable mortgage lending practices in Pennsylvania, according to Sen. Ted Erickson (R-26), who co-sponsored the measures. 

The bills are now headed to the House of Representatives for consideration.

"Passage of this package will help Pennsylvania rein in predatory lending practices that have put family budgets and the economy at risk," said Erickson. "Most brokers and lenders adhere to legal and ethical guidelines, but this package acknowledges that there are too many who seek to abuse the system. Enacting enhanced regulation, along with providing more information that will allow citizens to make sound borrowing decisions, can help ensure that mortgages represent what they've long represented – pathway to the American dream of home ownership."

"We have seen the impact that predatory lending has had on families and on our state and national economies," Senator Erickson said. "These bills would enact important reforms to Pennsylvania's banking codes to better protect consumers."

• Senate Bill 483 would reduce the number loans subject to prepayment penalties -- a penalty imposed on an individual if they pay off their mortgage early – by eliminating it for loans of $200,000 or less. 
• Senate Bill 484 would permit the Department of Banking to publicly release information on pending enforcement actions and fines levied against mortgage bankers and brokers, and whether a broker license application submitted by any person or corporation has been denied.
• Senate Bill 485 revamps the State Board of Certified Real Estate Appraisers, giving the panel authority to deny, suspend or revoke a certificate, and increasing the civil penalties for violations of the Real Estate Appraisers Certification Act from $1,000 to $10,000.
• Senate Bill 486 would 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.  It also reduces the interest rate on Homeowners Emergency Mortgage Assistance Program loans from 9% to the interest rate calculated under Act 6 of 1974 (6.5% as of March 2008).
• Senate Bill 487 would create a new licensing category for individual "mortgage originators" -- an individual not licensed as a mortgage banker, mortgage broker or loan correspondent who deals directly with the consumer by soliciting, accepting or offering to accept mortgage loan applications or negotiating mortgage loan terms. 
• Senate Bill 488 would create a new licensing category for individual 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.

The mortgage reform bills approved by the Senate today are based on the findings of a mortgage industry study mandated by House Resolution 364, which was adopted in 2003. The measure directed the Department of Banking to study residential lending practices in Pennsylvania, examine trends in foreclosures and document lending practices that are harmful to consumers.
 

CONTACT:

Tom Golden
717-787-1350

 

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