For Immediate Release
March 11, 2008
Contact:  Lisa Landis
Legislative Director
717-787-6709
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Senate Approves Mortgage Reform Legislation

Senator Brubaker applauds measures in light of OPFM, Inc. bankruptcy

HARRISBURG – The Senate approved six bills today targeting predatory and other questionable mortgage lending practices in Pennsylvania, according to state Senator Mike Brubaker (R-Lancaster). 

"Here in Pennsylvania, the effects of predatory lending and other questionable mortgage practices was brought into sharp focus last fall when more than 800 individuals and families were impacted by the bankruptcy filings of OPFM, Inc., and Image Masters," Brubaker said. "I wholeheartedly believe that we must take a hard look at what we can do in the General Assembly to ensure that such situations do not ever occur again, and this mortgage reform package is a significant step toward that goal." 

The package includes several bills that will help the state monitor and penalize those who try to take advantage of Pennsylvania consumers. 

Senate Bills 487 and 488 would create new licensing categories for individual mortgage originators who deal directly with the consumer by soliciting, accepting or offering to accept mortgage loan applications or negotiating mortgage loan terms for primary and secondary mortgage loans.  

Brubaker said that these new licensing categories in particular are important measures to protect consumers.  

"Anyone who works directly with consumers in regard to mortgage loans in any capacity, including solicitation and advertising, should be required to have responsibilities similar to those required by others who are licensed to sell financial products," Brubaker said. 

Senate Bill 486 would require lenders to send copies of foreclosure notices to the Pennsylvania Housing Finance Agency. This change would allow the state to monitor mortgage foreclosures on a statewide basis.  

Senate Bill 484 would permit the Department of Banking to publicly release information on pending enforcement actions and fines levied against non-depository licensees. Senate Bill 485 would amend the Real Estate Appraisers Certification Act regarding board membership, disciplinary measures and penalties.  

Senate Bill 483 would amend the Loan Interest and Protection Law of 1974 to increase the monetary cap in the Act from $50,000 to $200,000. One of the most important protections in the bill is eliminating pre-payment penalties for loans $200,000 or less, Brubaker said.  

The mortgage reform bills approved by the Senate today are based on the findings of a mortgage industry study mandated by House Resolution 364, which was adopted in 2003. This Resolution directed the Department of Banking to study residential lending practices in Pennsylvania, examine trends in foreclosures and document lending practices that are harmful to consumers.

Senate Bills 483, 484, 485, 486, 487 and 488 will now go to the House of Representatives for consideration.  

"I have been actively working with the families in my area who have been impacted by the OPFM situation over the past several months to ensure that they have the information and resources they need to work their way through a very difficult situation," Brubaker said. "I am very pleased that the Senate is actively addressing this critical matter, and hope that the House will also give it due consideration," Brubaker said.