PRINTER'S NO. 2852
No. 2033 Session of 2007
INTRODUCED BY BEAR, KESSLER, DENLINGER, BOYD, COX, CREIGHTON,
CUTLER, HARHART, HENNESSEY, HICKERNELL, MENSCH, NICKOL,
QUIGLEY, REICHLEY, ROHRER, SANTONI, SAYLOR, SEIP, STURLA,
SWANGER, TRUE AND DALLY, NOVEMBER 15, 2007
REFERRED TO COMMITTEE ON COMMERCE, NOVEMBER 15, 2007
AN ACT
1 Amending the act of December 22, 1989 (P.L.687, No.90), entitled
2 "An act providing for the regulation and licensing of
3 mortgage bankers and mortgage brokers; imposing additional
4 powers and duties on the Department of Banking and the State
5 Real Estate Commission; and providing penalties," further
6 providing for licensee limitations and for penalties.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. Sections 309 and 314 of the act of December 22,
10 1989 (P.L.687, No.90), known as the Mortgage Bankers and Brokers
11 and Consumer Equity Protection Act, amended June 25, 2001
12 (P.L.621, No.55), are amended to read:
13 Section 309. Licensee limitations.
14 (a) Prohibitions.--A licensee shall not:
15 (1) Transact any business subject to the provisions of
16 this chapter under any other name except those designated in
17 its license. A licensee that changes its name or place or
18 places of business shall immediately notify the department,
19 which shall issue a certificate, if appropriate, to the
1 licensee which shall specify the licensee's new name or
2 address.
3 (2) Conduct any business other than any business
4 regulated by the department in any place of business licensed
5 pursuant to this chapter without at least 90 days' prior
6 written notification to the department.
7 (3) Disburse the proceeds of a mortgage loan in any form
8 other than cash, electronic fund transfer, certified check or
9 cashier's check where such proceeds are disbursed by the
10 licensee to a closing agent. This paragraph shall not be
11 construed as requiring a lender to utilize a closing agent
12 and shall not apply to disbursements by check directly from
13 the licensee's account payable to the borrower, borrower
14 designees or other parties due funds from the closing.
15 (4) In the case of a loan correspondent, service
16 mortgage loans.
17 (5) In the case of a mortgage broker or limited mortgage
18 broker, commit to close or close mortgage loans in its own
19 name, service mortgage loans, enter into lock-in agreements
20 or collect lock-in fees, provided, however, that a mortgage
21 broker or limited mortgage broker can provide a lender's
22 lock-in agreement to a borrower on behalf of that lender and
23 collect lock-in fees on the lender's behalf payable to that
24 lender.
25 (6) Execute additional extensions of credit unless the
26 extension is secured by a lien on a principal residence and
27 the borrower has agreed to each specific extension of credit
28 in writing.
29 (b) Authority to close loans in attorneys' and title
30 insurance companies or agencies' offices.--Nothing contained in
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1 this chapter shall prohibit any licensee or person exempt from
2 licensure hereunder from closing any loans made under the
3 provisions of this chapter in the offices of attorneys-at-law
4 licensed by and located in this Commonwealth and title insurance
5 companies or agencies licensed by and located in this
6 Commonwealth.
7 Section 314. Penalties.
8 (a) Nonlicensees.--Any person who is not licensed by the
9 department or is not exempted from the licensing requirements in
10 accordance with the provisions of this chapter and who engages
11 in the business of a mortgage banker, loan correspondent,
12 mortgage broker or limited mortgage broker commits a felony of
13 the third degree. In addition, a person violating this
14 subsection shall be subject to a civil penalty equal to treble
15 the damages sustained by each person who sustained damages
16 because of the unlicensed activities.
17 (b) Nonlicensees subject to the provisions of this
18 chapter.--Any person who is subject to the provisions of this
19 chapter, even though not licensed hereunder, or any person who
20 is not licensed by the department or is not exempt from the
21 licensing requirements, who violates any of the provisions to
22 which it is subject shall be subject to a [fine] civil penalty
23 levied by the department or commission of [up to $2,000 for each
24 offense.] treble the damage sustained by each person harmed by
25 the actions of the nonlicensee, to be awarded by the department
26 to each of the persons harmed. Any [such] nonlicensed person who
27 commits [three or more offenses may, at the discretion of the
28 department or commission,] an offense under this subsection
29 shall be prohibited from engaging in the first mortgage loan
30 business [unless licensed] as defined under this chapter.
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1 (c) Violations by licensees.--Any person licensed under the
2 provisions of this chapter or any director, officer, employee or
3 agent of a licensee who shall violate the provisions of this
4 chapter or shall direct or consent to such violations shall be
5 subject to a fine levied by the department of up to [$2,000]
6 $10,000 for each offense. In addition, any person licensed under
7 the provisions of this chapter or any officer, employee or agent
8 of a licensee who shall intentionally or knowingly violate the
9 provisions of section 309(a) shall be required to surrender its
10 license and shall be prohibited from engaging in any business
11 activities regulated under this act.
12 (d) Limited powers.--The powers conferred upon the
13 commission by subsection (b) shall only be exercised by the
14 commission in relation to persons licensed pursuant to the
15 provisions of the act of February 19, 1980 (P.L.15, No.9), known
16 as the Real Estate Licensing and Registration Act, who are
17 subject to subsection (b) under section 303(b)(3) and the
18 exercise of such power by the commission in relation to such
19 persons shall be exclusive.
20 Section 2. This act shall take effect in 60 days.
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