PA (finally) gets tough on Mortgages!
<span class=”Apple-style-span” style=”font-family: verdana; font-size: 11px; line-height: 12px; “><h1 style=”font-size: 150%; “>Rendell signs 5 mortgage laws</h1><p class=”byline lastline” style=”font-size: 10px; color: rgb(102, 102, 102); padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; margin-top: 0px; margin-right: 0px; margin-bottom: 12px; margin-left: 0px; “></p><p class=”byline lastline” style=”font-size: 10px; color: rgb(102, 102, 102); padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; margin-top: 0px; margin-right: 0px; margin-bottom: 12px; margin-left: 0px; “>Philadelphia INQUIRER Staff</p><div class=”body-content” style=”font-size: 12px; “>Gov. Rendell today signed into law five bills that designed to protect homebuyers and to toughen oversight of the mortgage industry.<p style=”margin-top: 6px; font-size: 12px; “>The bills, which Rendell signed during a noon ceremony today in Reading, require loan sales staff to be licensed by the state, restrict prepayment penalties, increase penalties for misconduct by real estate appraisers, make mortgage companies provide state notification when they intend to foreclose, and let the state more quickly publicize enforcement activities against mortgage companies, the state said in a news release.</p><p style=”margin-top: 6px; font-size: 12px; “>The provisions are:</p><p style=”margin-top: 6px; font-size: 12px; “>H.B. 2179 assures Pennsylvania homebuyers that the person selling them a mortgage has successfully passed a background check, completed training specific to state and federal mortgage laws, passed a test to prove their knowledge, and is licensed by the Department of Banking. In the past, only mortgage companies had to be licensed in Pennsylvania, not their employees. With this new law consumers can be confident that the individual who handles their mortgage transaction meets certain standards.</p><p style=”margin-top: 6px; font-size: 12px; “>S.B. 483 makes sure that hard-working Pennsylvanians who buy typical family homes cannot be trapped in escalating, unaffordable mortgages by certain prepayment penalty provisions. In the past, prepayment penalties had been used by some unscrupulous lenders to strip homeowners of hard-earned equity and drive up transaction costs. This law bans licensees from including prepayment penalties on mortgages of $217,873 or less, a figure that will be adjusted for inflation every year from now on.</p><p style=”margin-top: 6px; font-size: 12px; “>S.B. 484 gives homebuyers more information to evaluate potential mortgage companies or sales people. Until now, Pennsylvania law actually prohibited the Banking Department from telling the public about enforcement actions, fines and penalties against licensees such as mortgage bankers and brokers. This new law allows the Banking Department to release more information more quickly.</p><p style=”margin-top: 6px; font-size: 12px; “>S.B. 485 increases a homebuyer’s confidence that the appraised value of the home is sound. In the run-up to the housing boom, there was significant pressure on appraisers to set values to make certain types of mortgages more attractive and attainable, making it possible for buyers to borrow more than the home was actually worth. This new law extends the consumer protection and lending expertise of the state’s appraisers’ board by adding the Attorney General and the Secretary of Banking to its membership. It also increases the maximum penalty for appraiser misconduct to $10,000 per violation.</p><p style=”margin-top: 6px; font-size: 12px; “>S.B. 486 puts individual homeowners’ struggles into a statewide context. Currently, foreclosure notices are sent only to the homeowner and filed in the borrower’s home county. The new law requires that a copy of every foreclosure notice be sent to the Pennsylvania Housing Finance Agency so that foreclosure activity can be monitored in real time. With this data, state government will be able to identify potentially troubling trends, making it possible to intervene more quickly and strategically to help save people’s homes.</p><p style=”margin-top: 6px; font-size: 12px; “>To help struggling homeowners, last year Governor Rendell launched two new loan programs – REfinance to an Affordable Loan, or REAL; and Homeowner Equity Recovery Opportunity, or HERO – to help homeowners facing foreclosure. The Pennsylvania Housing Finance Agency manages both programs.</p></div></span>