Pennsylvania Origination Reference Guide
- Kacey Olson
Owned by Kacey Olson
Aug 30, 2017
5 min read
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| Citation | Topic | Requirement |
| Bureau of Consumer Credit Agencies / 10 Pa. Code §49.3 | Adverse Implications Disclosure | When offering a reverse mortgage loan, a licensee must consider the projected financial condition of the applicant once the time period for making loan advances has expired and disclose to the applicant the adverse implications of a term reverse mortgage loan if the applicant does not have alternate sources of funds to meet the applicant's financial needs following the lapse of advances under a term reverse mortgage loan. |
| Mortgage Licensing Act / 7 Pa. Cons. Stat. Ann. §6124(3) | Agreement to Pay any Amount Other than the Unpaid Balance | No writing of any kind executed in connection with a mortgage loan may contain an agreement to pay any amount other than the unpaid balance of the loan agreement or promissory note or any other charge authorized by the MLA. |
| Mortgage Bankers and Brokers Act / 63 Pa. Cons. Stat. Ann. §456.511(a) | Balloon Payment | A covered loan may not contain a scheduled payment that is more than twice as large as the average of the scheduled monthly payments unless the balloon payment is due and payable not less than 120 months after the date of the loan. This restriction does not apply when the payment schedule is adjusted to account for the seasonal or irregular income of the borrower or if the purpose of the loan is a bridge loan connected with the purchase or construction of a house which will become the borrower's principal residence. |
| Mortgage Licensing Act / 7 Pa. Cons. Stat. Ann. §6122(b) | Broker Fee Disclosure | A mortgage broker or loan correspondent may also charge a broker's fee if the fee is disclosed to the borrower for whom the loan is being negotiated or arranged. |
| Bureau of Consumer Credit Agencies / 10 Pa. Code §46.2(l) | Copies of Appraisal and Other Documents | Upon request, a mortgage lender or mortgage broker must provide to an applicant or authorized representative of an applicant, unless prohibited by Federal or State law, copies or originals of the documents associated with a loan that an applicant has paid for or signed, to the extent the documents are in the lender's or broker's possession. Examples of documents include: (1) loan applications; (2) appraisals; (3) surveys; (4) loan documents; (5) disclosures; and (6) any fee agreement executed by the applicant and the licensee. |
| Mortgage Licensing Act / 7 Pa. Cons. Stat. Ann. §6121 | Copy of Note, Security Instrument and Insurance | A licensee must provide the following to a borrower: (1) a copy of the promissory note evidencing the mortgage loan and any mortgage loan agreement, mortgage instrument or other document evidencing a mortgage loan signed by the borrower; and (2) written evidence of any credit life, credit and accident and health, credit unemployment and property insurance provided by the licensee to the borrower. |
| Mortgage Licensing Act / 7 Pa. Cons. Stat. Ann. §6123(7) | Exclusive Recipient of Notices | A mortgage broker or mortgage originator may not be (or designate) the exclusive recipient of notices or other communications sent from a lender or servicer to a borrower. |
| Mortgage Licensing Act / 7 Pa. Cons. Stat. Ann. §6121(10) | Fee Disclosure | At the time of loan application, a licensee must disclose to the borrower, in writing, which fees paid or to be paid are nonrefundable. |
| Mortgage Bankers and Brokers Act / 63 Pa. Cons. Stat. Ann. §456.512(f) | Insurance Notice to Borrower | Unless insurance premiums are calculated, earned and paid on a monthly or other regular periodic basis, a lender may not sell credit life, accident and health or unemployment insurance products in conjunction with a covered loan without providing a separate disclosure with a copy acknowledged by the insured no later than the time of closing. |
Lock-In Agreement | A licensee must ensure that all lock-in agreements are in writing and contain at least the following provisions: (1) the expiration date of the lock-in, if any; (2) the interest rate locked in, if any; (3) the discount points locked in, if any; (4) the commitment fee locked in, if any; and (5) the lock-in fee, if any. Mortgage brokers and mortgage originators are prohibited from entering enter into lock-in agreements or collecting lock-in fees. However, a mortgage broker or mortgage originator may provide a lender's lock-in agreement to a borrower on the lender's behalf and may collect lock-in fees payable to that lender on the lender's behalf. | |
| Mortgage Licensing Act / 7 Pa. Cons. Stat. Ann. §6121(14) | NMLS Unique Identifier | A mortgage originator must clearly display the mortgage originator's NMLS unique identifier on all mortgage loan application forms and personal solicitations or advertisements, including business cards. |
| Bureau of Consumer Credit Agencies / 10 Pa. Code §49.3 | Non-Borrower Spouse Disclosure | A licensee must fully disclose the possible consequences of, a reverse mortgage loan for a non-borrower spouse living in the mortgaged property. Consequences include the non-borrower spouse being unable to keep the property if the applicant ceases to live in the property because of the applicant's death or other circumstances which cause the applicant to vacate the premises. |
| Mortgage Bankers and Brokers Act / 63 Pa. Cons. Stat. Ann. §456.512(a) | Notice to Borrower | A lender may not make a covered loan unless the lender or a mortgage broker provides this notice, or substantially similar notice, in writing to the borrower at least 3 business days prior to the closing of the loan. |
| Bureau of Consumer Credit Agencies / 10 Pa. Code §46.2(j) | Offering a Covered Loan when Applicant Qualifies for a Non-Covered Loan | If a mortgage lender or mortgage broker qualifies for a loan offered by a lender or broker under the MLA or the Consumer Discount Companies Act, then the lender or broker may not offer to the applicant a covered loan without advising the applicant that the applicant qualifies for a loan other than a covered loan. |
| Mortgage Licensing Act / 7 Pa. Cons. Stat. Ann. §6122(a) | Optional Insurance Disclosure | A lender may provide access to credit life, credit disability, credit accident and health and credit unemployment insurance so long as: (1) the borrower is not required to purchase insurance as a condition of the making of a mortgage loan; (2) all contracts utilized reflect a clear disclosure that the purchase of insurance is not a prerequisite to obtaining a mortgage loan; and (3) the borrower consents to insurance in writing (if borrowers desire joint-life or joint accident and health insurance, all borrowers must consent to the insurance in writing). |
| Mortgage Licensing Act / 7 Pa. Cons. Stat. Ann. §6122(a) | Right to Choose Insurance Provider Disclosure | If the borrower elects to obtain property insurance through the lender, the borrower must consent to insurance in writing. |
| Bureau of Consumer Credit Agencies / 41 Pa. Code Stat. Ann. §301(e) | Variable Rate Mortgage Disclosure (Security Instrument) | The security document or documents for a variable rate residential mortgage must contain the following provisions: (1) that the index for determining the increase or decrease in interest rate is the lawful rate of interest as determined under 41 PCSA §301 for residential mortgages; (2) a requirement that when an increase in the interest rate is required by a movement in a particular direction of the prescribed standard an identical decrease is required in the interest rate by a movement in the opposite direction of the prescribed standard; (3) the rate of interest may change not more than once during changes; (4) the change in the interest rate must be 1/4 of 1 percent in any semiannual period, and must not result in a rate more or less than 2 1/2 percentage points greater or less than the rate for the first loan payment due after the closing of the loan; (5) the rate of interest must not change during the first annual period of the loan; and (6) an increase or decrease in the interest rate must be effected when the index moves in percentage that the difference between the present index rate and present mortgage rate varies not less than 1/4 of 1 percentage point from the difference between the index and mortgage rates at the date of the first contracted loan repayment. |