RESIDENTIAL MORTGAGE LENDING 2006 LEGISLATIVE ACTS

Act 188 (HB 602), effective August 15, 2006, prohibits prepayment penalties on loans secured by residential real estate when the prepayment is made from proceeds of a claim made under a policy of insurance from casualty, flood or other loss or damage to property securing the loan in connection with a gubernatorial declared disaster. 

Act 232 (HB 1189), effective June 2, 2006, authorizes the Office of Financial Institutions to collect a $25 fee for checks returned by the financial institution unpaid, refused or declined.

Act 236 (HB 1269), effective June 2, 2006, authorizes the Office of Financial Institutions to obtain state and national criminal history by requiring applicants to provide fingerprints and to collect a fee to pay the cost of obtaining such information.

ACT 237 (HB 1271), effective August 15, 2006, amends the Residential Mortgage Lending Act as follows:

• provides up to a $1,000 late filing fee for failing to timely submit an audit or other acceptable evidence of financial responsibility
• provides that renewal of a license is automatic if renewal application is complete, all fees are paid and financial responsibility has been maintained. Renewal of licenses will no longer be delayed pending completion of examinations or investigations
• provides that no new license be issued company or originator, if a fee or penalty remains unpaid
• prohibits a person who has applied and been denied from re-applying for a period of three years
• prohibits a person who had a license denied or revoked from holding a managerial position or position as a processor with a licensed company
• adds justification for revocation of a license if a condition exists that would have been a basis for denial
• changes the requirement to file a change of control application to 51% instead of 50%
• authorizes Commissioner to immediately suspend a license for 1) failing to maintain financial responsibility; 2) committing serious violations which are a danger to the public; 3) paying fees with insufficient funds or returned check but still gives them an opportunity to be heard in a hearing before an Administrative Law Judge
• prohibits a person whose license has been revoked from re-applying for five years.
• requires parties appealing an adverse ruling of an administrative law judge to pay the estimated cost of appeal, including the costs of preparing the record within 60 days of filing their petition for appeal. The amendment has no effect on the Division of Administrative law or its processes
• clarifies that cost of appeal of an Administrative judge’s decision affirming a decision of the Commissioner shall be borne by the appellant and shall be paid within 60 days of filing the appeal.  Failure to pay such fees shall result in dismissal of the appeal
• clarifies that final and valid judgment from an administrative law judge may be made executory by the Commissioner in accordance with the Code of Civil Procedure
• prohibits collection of prepayment penalties when prepayment is the result of insurance proceeds as a result to damage of property securing the loan if damage was a result of a Gubernatorial declared disaster
• prohibits financing of single premium insurance such as credit life, accidental death and dismemberment, debt cancellation, etc as part of the mortgage loan.  Excludes single premium private mortgage insurance

Act 456 (SB 344), effective June 15, 2006, authorizes the Commission in his discretion to disclose:

• statistical information compiled by the Office of Financial Institutions
• any action taken and the legal basis for the action as to the fitness of any person to receive, continue to hold any license requiring approval of the Commissioner
• the status of any application required to be filed with the office
• any action to deny, suspend, or revoke a license, order refunds, impose civil money penalties, enter into consent agreements
• guidance, advisory opinions, interpretations, provided the identifying information is removed from the text or summary