COSTA APPLAUDS SENATE PASSAGE OF MORTGAGE REFORM BILLS

HARRISBURG, March 11, 2008 -- State Sen. Jay Costa (D-Allegheny) today applauded the unanimous Senate passage of a six-bill package of mortgage lending bills.

Costa said the legislation would give the Pennsylvania Department of Banking new enforcement powers to get predatory lenders out of the mortgage industry.

“I applaud my Senate colleagues for taking a stand against predatory lenders and making strides to combat the struggling housing market,” Costa said. “The mortgage foreclosure rates across the nation are through the roof, and this legislation is unquestionably an aggressive step forward that will help protect Pennsylvanian homeowners.”

According to RealtyTrac, the leading on-line marketplace for foreclosure properties, in 2007 there were more than 2.2 million foreclosure filings on nearly 1.3 million properties across the United States.

Costa said the bills (Senate Bills 483, 484, 485, 486, 487, and 488) would:

 -- add interest-rate protections for consumers by increasing the maximum interest cap from $50,000 to $200,000 for residential mortgage loans;

-- permit the Department of Banking to release information on pending enforcement actions and fines against non-depository licensees. And require licensees to use a national electronic licensing system and obtain criminal history checks;

-- improve and strengthen enforcement actions against real estate appraisers who perform fraudulent work;

-- expand the state Board of Certified Real Estate Appraisers from 7 to 11 members and establish three classes of real estate appraisers: Certified Real Estate Appraisers, Certified General Appraisers and Appraiser Trainee License;

-- improve mortgage oversight and give PHFA more flexibility to accept late payments, make compromise mortgage payoffs and set interest rates on loans and also change the assistance interest rate from 9 percent to a mortgage interest rate established under the Usury Law;

-- create a new licensure category for mortgage originators who deal directly with the consumer so that their actions can be better accounted for in real estate transactions;

-- and require licensees to complete continuing education.

The bills are now in the House of Representatives for consideration.