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.