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iNTERPRETIve Letters - Mortgage Bankers & Brokers & Consumer Equity Protection Act


The Department of Banking and Securities uses interpretive letters to provide guidance and clarification of its position on an issue at the time. You should contact your attorney for legal advice regard the Mortgage Bankers & Brokers & Consumer Equity Protection Act - 63 P.S. ' 456.101 et seq. NOTE: most links on this page are to PDF documents.

10/20/99
Refusing to Fund Closed Mortgages
Letter to licensees regarding refusing to fund closed mortgage loans after loan documents have been signed by loan customer is not permissible under the Mortgage Bankers and Brokers Act.
 
Section 456.302 - Definitions
 
12/08/05
Internet Lead Generators
Letter addresses licensing requirements for internet lead generators.
 
06/01/05
Lines of Credit as an Investment
Letter discusses licensing requirements for an entity that is purchasing first and secondary home equity lines of credit as an investment.
 
10/21/03
Licensee Outsourcing of Mortgage Functions
A lender licensee under both the MBBCEPA and SMLA may contract with a company, which will also be a lender licensee under the MBBCEPA and SMLA, to have the company perform certain back-office mortgage processing functions for the lender licensee.
 
11/05/02
Private Label Service
Proposed "private label" service activities of internet service provider would require licensure under the MBBCEPA and SMLA.
 
01/17/02
Licensing for Wholesale Account Representatives
Letter addresses soliciting of loans from mortgage brokers to be placed with mortgage lender.
 
06/13/01
Credit Services Organizations to Licensed Mortgage Brokers
It is the Department position that a licensed first mortgage broker or secondary mortgage loan broker may provide the services of a "credit services organization" as an incidental function to soliciting, negotiating, and arranging a mortgage loan under the MBBA or SMLA, notwithstanding the "credit services organization" provisions in the CSA, provided the mortgage broker does not charge or accept a separate fee for such services AND accepts not more than the consideration or fee permitted by the MBBA or SMLA for brokering a mortgage loan.  The Department further finds that (i) improving a buyer's credit record, history or rating; (ii) obtaining an extension of credit for a buyer; or (iii) providing advice or assistance to a buyer with regard to (i) or (ii) are activities that may be included in the ordinary course of business of a licensed first mortgage broker or licensed secondary mortgage loan broker.
 
Section 456.303 - License Requirements and Exemptions
 
01/17/02
Licensing for Wholesale Account Representatives
Letter addresses soliciting of loans from mortgage brokers to be placed with mortgage lender.
 
12/27/01
Exemption from Licensing & Office Requirements
Letter addresses out-of-state state-chartered bank originating residential mortgage loans in Pennsylvania.
 
08/01/01
Exempt from Licensure Pursuant to the MBBCEPA
It is the Department position that only W-2 employees of excepted entities are exempt from licensure pursuant to the MBBA.  Based upon the foregoing, the Insurance Agents, as 1099 independent contractors, will each be required to obtain a license pursuant to the MBBA in order to broker or originate more than two secondary mortgage loans in a calendar year in Pennsylvania.
 
06/13/01
Credit Services Organizations to Licensed Mortgage Brokers
It is the Department position that a licensed first mortgage broker or secondary mortgage loan broker may provide the services of a "credit services organization" as an incidental function to soliciting, negotiating, and arranging a mortgage loan under the MBBA or SMLA, notwithstanding the "credit services organization" provisions in the CSA, provided the mortgage broker does not charge or accept a separate fee for such services AND accepts not more than the consideration or fee permitted by the MBBA or SMLA for brokering a mortgage loan.  The Department further finds that (i) improving a buyer's credit record, history or rating; (ii) obtaining an extension of credit for a buyer; or (iii) providing advice or assistance to a buyer with regard to (i) or (ii) are activities that may be included in the ordinary course of business of a licensed first mortgage broker or licensed secondary mortgage loan broker.
 
Section 456.304 - Application for License
 
01/09/03
Internet Company Brokering Business Loans
Letter addresses loan broker license requirements applicable to Internet Company brokering business loans.
 
Section 456.308 - Licensing Requirements
 
12/15/03
Prepayment Penalty
Letter states that, notwithstanding prior interpretations, a prepayment penalty may not be charged on a residential first or secondary mortgage loan in an original principal amount of $50,000 or less.
 
Section 456.309 - Licensee Limitations
 
12/27/01
Out-of-State Bank Originating Residential Mortgage Loans in Pennsylvania
Letter addresses out-of-state state-chartered bank originating residential mortgage loans in Pennsylvania.
 
09/17/98
Single Premium Term Life Insurance
Department gave approval for a Licensee to sell single premium term life insurance ("SPT life insurance") at the Licensees places of business licensed by the Department on a conditional basis for all proposed sales to both MBBA and SMLA customers: Pursuant to 7 P.S. 6611(5) and 63 P.S. ' 456.09(a)(2).
 
Section 456.310 - Authority of Department or Commission
 
06/13/01
Credit Services Organizations to Licensed Mortgage Brokers
It is the Department position that a licensed first mortgage broker or secondary mortgage loan broker may provide the services of a "credit services organization" as an incidental function to soliciting, negotiating, and arranging a mortgage loan under the MBBA or SMLA, notwithstanding the "credit services organization" provisions in the CSA, provided the mortgage broker does not charge or accept a separate fee for such services AND accepts not more than the consideration or fee permitted by the MBBA or SMLA for brokering a mortgage loan.  The Department further finds that (i) improving a buyer's credit record, history or rating; (ii) obtaining an extension of credit for a buyer; or (iii) providing advice or assistance to a buyer with regard to (i) or (ii) are activities that may be included in the ordinary course of business of a licensed first mortgage broker or licensed secondary mortgage loan broker.
 
Section 456.503 - Definitions
 
1/8/2014
Consumer Equity Protection Act (the CEPA), changes in federal law
Deputy Secretary’s Letter announces changes to coverage of the Consumer Equity Protection Act as a result of changes in federal law.
 
12/15/03
Prepayment Penalty
Letter states that, notwithstanding prior interpretations, a prepayment penalty may not be charged on a residential first or secondary mortgage loan in an original principal amount of $50,000 or less.
 
Section 456.511 - Limitations on Covered Loan Terms
 
12/15/03
Prepayment Penalty
Letter states that, notwithstanding prior interpretations, a prepayment penalty may not be charged on a residential first or secondary mortgage loan in an original principal amount of $50,000 or less.