PRINTER'S NO. 4259
No. 2784 Session of 2006
INTRODUCED BY PETRARCA, PISTELLA, READSHAW, BELARDI,
CALTAGIRONE, GOODMAN, GRUCELA, LEVDANSKY, MANN, REED, SAYLOR,
SHANER, SOLOBAY, YOUNGBLOOD, BEYER, FRANKEL, MYERS, PALLONE
AND SIPTROTH, JUNE 19, 2006
REFERRED TO COMMITTEE ON COMMERCE, JUNE 19, 2006
AN ACT
1 Amending the act of January 30, 1974 (P.L.13, No.6), entitled
2 "An act regulating agreements for the loan or use of money;
3 establishing a maximum lawful interest rate in the
4 Commonwealth; providing for a legal rate of interest;
5 detailing exceptions to the maximum lawful interest rate for
6 residential mortgages and for any loans in the principal
7 amount of more than fifty thousand dollars and Federally
8 insured or guaranteed loans and unsecured, noncollateralized
9 loans in excess of thirty-five thousand dollars and business
10 loans in excess of ten thousand dollars; providing
11 protections to debtors to whom loans are made including the
12 provision for disclosure of facts relevant to the making of
13 residential mortgages, providing for notice of intention to
14 foreclose and establishment of a right to cure defaults on
15 residential mortgage obligations, provision for the payment
16 of attorney's fees with regard to residential mortgage
17 obligations and providing for certain interest rates by banks
18 and bank and trust companies; clarifying the substantive law
19 on the filing of and execution on a confessed judgment;
20 prohibiting waiver of provisions of this act, specifying
21 powers and duties of the Secretary of Banking, and
22 establishing remedies and providing penalties for violations
23 of this act," eliminating a mortgage prepayment penalty for
24 all residential mortgages, regardless of amount.
25 The General Assembly of the Commonwealth of Pennsylvania
26 hereby enacts as follows:
27 Section 1. The definition of "residential mortgage" in
28 section 101 of the act of January 30, 1974 (P.L.13, No.6),
1 referred to as the Loan Interest and Protection Law, amended
2 April 6, 1979 (P.L.15, No.4), is amended to read:
3 Section 101. Definitions.--As used in this act:
4 * * *
5 "Residential mortgage" means an obligation to pay a sum of
6 money in an original bona fide principal [amount of fifty
7 thousand dollars ($50,000) or less] of any amount, evidenced by
8 a security document and secured by a lien upon real property
9 located within this Commonwealth containing two or fewer
10 residential units or on which two or fewer residential units are
11 to be constructed and shall include such an obligation on a
12 residential condominium unit.
13 * * *
14 Section 2. Section 405 of the act is amended to read:
15 Section 405. Prepayment Penalty Prohibited.--Residential
16 mortgage obligations of any amount contracted for on or after
17 the effective date of this act may be prepaid without any
18 penalty or other charge for such prepayment at any time before
19 the end of the period of the loan.
20 Section 3. This act shall take effect in 60 days.
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