Industry NewsMortgage

New laws for Pennsylvania mortgage brokers

Lawmakers respond to $29 million fraud scheme

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Two Pennsylvania laws enacted in the wake of a $29 million mortgage fraud scheme will bar state-licensed mortgage brokers and loan originators from being the sole recipients of information from lenders, and penalize companies that retaliate against whistle-blowing employees.The laws "represent a critical step forward in our strategy to combat mortgage lending fraud and abuse in Pennsylvania," Gov. Edward G. Rendell said in signing Senate Bill 170 and House Bill 985 Monday. Both laws take effect in 60 days.Senate Bill 170 prohibits state-licensed mortgage brokers or originators from closing mortgage loans in their own name, servicing mortgage loans, entering into lock-in agreements or collecting lock-in fees, and from designating themselves as the exclusive recipient of notices or other communications sent from a lender or servicer to a consumer.The law allows mortgage brokers to continue to provide a lender's lock-in agreement to consumers on behalf of lenders, and to collect...