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FOR IMMEDIATE RELEASE |
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Rep. Peter J. Daley |
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Daley’s efforts produce results; House passes mortgage reform bills
HARRISBURG, April 8 – The State House today passed a major revision of mortgage lending laws aimed at reforming the industry.
State Rep. Peter J. Daley, the Commerce Committee chairman who led the effort, said that the vote capped a year-long effort involving hearings, negotiations, and the drafting and re-drafting of legislation.
Daley, who teamed up with his Republican counterpart, Rep. Dick Hess, R-Bedford, to guide the package through the House, said: "This is a critical step in the right direction to safeguarding mortgage borrowers in Pennsylvania."
The core of the package, H.B. 2179, sponsored by Daley, minority Commerce Chairman Hess and 21 other House members, would establish a new requirement for all mortgage originators to be licensed by the state. The licensure requirement would provide a tracking and disciplinary mechanism for the Banking Department, and would require pre-license education for the people involved in direct sales of mortgages.
"This package will go a long way to offer Pennsylvania homebuyers the protections they deserve," Hess said. "I appreciate the opportunity I have had to work with Representative Daley and the affected industries to develop a package that can be widely supported. I hope the Senate will move quickly to get this legislation to the governor’s desk."
"Just like the corner barber, commercial truck driver or dozens of other professions who work with the public trust, the professionals who make what is the most important financial transaction of most people’s lives should be examined, trained, professional and accountable," Daley said. "Everyone who makes a mortgage loan in Pennsylvania should play by the same rules and the Banking Department should be able to check their backgrounds, ensure their understanding of the law, and have tools available to sanction misconduct."
The bills that passed the House today include:
· House Bill 1081 -- would increase oversight of state-certified appraisers.
· House Bill 1082 -- would allow the Banking Department to release information on denial, suspension, revocation, fines or other disciplinary orders against a licensee after a final order or adjudication by the secretary of Banking. The department currently must wait until all court appeals are exhausted.
· House Bill 1083 -- would create a reporting system for lenders to tell the Pennsylvania Housing Finance Agency about loan delinquencies, giving the state an early warning system on state and regional trends in foreclosures.
· House Bill 1084 -- would exclude pre-payment penalties on residential mortgage loans of less than $197,000. The current threshold is $50,000.
· House Bill 2179 -- would streamline the licensure and administrative process for mortgage brokers and bankers by creating a single license and creating a new licensure category for all mortgage originators, regardless of the type of lending involved.
Daley noted that the committee’s hearings included testimony from consumer advocates, bankers, mortgage industry representatives and public officials, leading to the development of comprehensive strategies that would serve as a solution to the problem.
The bills now go to the Senate for consideration.
"This will not cure the current mortgage crisis, but it will prevent more flawed contracts from getting into the system," Daley said. "I urge the Senate to swiftly pass this package of reform bills so we can send it to the governor’s desk for signing."
During his budget address, Gov. Rendell praised Daley for his commitment to mortgage reform. The governor has offered his support for passage of the five bills.
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