Pennsylvania Amends Mortgage Loan Licensing Provisions and Modifies “Base Figure” Definition

Pennsylvania Amends Mortgage Loan Licensing Provisions

Pennsylvania has modified provisions regarding mortgage loan licensing. Some of these provisions are effective immediately, while others are effective upon the promulgation of regulations by the Department of Banking and Securities of the Commonwealth.


“Clerical or support duties” has been updated to exclude “offering or negotiating mortgage servicing terms” to a consumer from its definition.

The term “delinquent” has been added to this section, and is defined as the date when a periodic payment is due and goes unpaid by the borrower.

Other definitions added to this section include “loss mitigation option,” “mortgage servicer,” and “single point of contact.”

License Requirements

Generally, a person must be licensed in order to lawfully engage in the mortgage loan business in Pennsylvania, though there are exceptions. A new exception has been added, which allows a mortgage lender to act as a mortgage servicer, even without a separate mortgage servicer license for loans he or she has originated, negotiated, and owns.

However, a person licensed only as a mortgage servicer may only perform the services of a mortgage servicer.

Additionally, Section 6131 sets out application requirements to be used by the department when issuing mortgage servicer licenses to potential applicants.

Mortgage Servicers

Upon an open-end mortgage being paid off in full, the mortgage servicer is required to do the following:

  1. Request the mortgage holder release the lien on the property and deliver to the consumer an assignment, release, or other certificate evidencing the release; and
  2. Request the mortgage holder cancel any insurance associated with the loan and refund the borrower any unearned portion of the insurance premium.

Mortgage servicers are also required to establish a single point of contact for borrowers to discuss foreclosure or loss mitigation matters, no later than the 36th day of a borrower’s delinquency.

Full text of Senate Bill 751

Pennsylvania Modifies “Base Figure” Definition

The Pennsylvania Department of Banking and Securities has updated its definition of “base figure” from $244,856 to $250,324 for the 2018 calendar year. This new figure is effective as of January 1, 2018.

Full text of Pennsylvania Bulletin 7054

  • 781-402-6416

Elizabeth Dailey, JD, is a regulatory compliance consultant with Bankers Advisory. She is a graduate of the University of New Hampshire and earned her juris doctor at New England Law. She is admitted to the Massachusetts Bar.

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