Proposed new law on lending issues
Harrisburg The Mortgage Bankers and Brokers Act of 1989 was the first comprehensive law to regulate mortgage bankers and brokers in Pennsylvania. The following is a list of reforms being proposed this year: Offenders of the Act would be fined up to $10,000 per offense, up from $2,000. Appraisers who overvalue homes would see fines go up to $10,000 per violation, up from $1,000. Licensing of individual mortgage loan originators, not just their companies. Permitting the Department of Banking to release information on pending enforcement actions about licensees when adequate, credible evidence exists instead of waiting for a final order. Banning prepayment penalties on loans of up to $197,000 from $50,000; the amount would be adjusted annually for inflation. Cut the interest rate on loans through the Homeowners’ Emergency Mortgage Assistance Program from 9 percent to reflect the current, lower market rate. Plain English disclosures of important loan terms, such as whether a loan would have a balloon payment, prepayment penalty, variable interest rate or negative amortization. Licensed mortgage professionals must reasonably determine a borrower’s ability to repay a loan given all of its terms and conditions, not just the ``teaser’’ rate.