6122 - Powers conferred on certain licensees engaged in the mortgage loan business.
§ 6122. Powers conferred on certain licensees engaged in the mortgage loan business. (a) Mortgage lenders.--If they are in compliance with the provisions of this chapter, mortgage lenders shall have the power and authority: (1) To make first and secondary mortgage loans and, subject to the limitations of this chapter, to charge and collect interest, origination fees and delinquency charges for the loans. (2) To collect fees or premiums for title examination, abstract of title, title insurance, credit reports, surveys, appraisals, notaries, postage, including messenger and express carrier, tax service or other costs or fees actually related to the processing of a mortgage loan application or making of a mortgage loan, when the fees are actually paid or incurred by the licensee and to collect fees or charges prescribed by law which actually are or will be paid to public officials for determining the existence of or for perfecting or releasing or satisfying any security related to the mortgage loan and include these in the principal of the mortgage loan. (3) To provide access to credit life, credit disability, credit accident and health and credit unemployment insurance. A consumer shall not be compelled to purchase credit life, credit disability, credit accident and health or credit unemployment insurance as a condition of the making of a mortgage loan, and all contracts utilized shall reflect a clear disclosure that the purchase of credit life, credit disability, credit accident and health or credit unemployment insurance is not a prerequisite to obtaining a mortgage loan. If, however, the consumer elects to obtain credit life, credit disability, credit accident and health or credit unemployment insurance through the licensee, the consumer shall consent thereto in writing. If consumers desire joint- life or joint accident and health insurance, all consumers shall consent thereto in writing. The insurance shall be obtained from an insurance company authorized by the laws of this Commonwealth to conduct business in this Commonwealth. Any benefit or return to the licensee from the sale or provision of the insurance shall not be included in the computation of the maximum charge authorized for mortgage loans under this chapter and shall not be deemed a violation of this chapter when the insurance is written pursuant to the laws of this Commonwealth governing insurance. (4) To require property insurance on security against reasonable risks of loss, damage and destruction and to provide access to the insurance to the consumer. The amount and term of the insurance shall be reasonable in relation to the amount and term of the mortgage loan contract and the value of the security. This requirement shall be satisfied if the consumer demonstrates at the time the mortgage loan is made that the consumer has valid and collectible insurance covering the property to be insured and has furnished the licensee with a loss payable endorsement sufficient for the protection of the licensee. If the consumer elects to obtain property insurance through the licensee, the consumer shall consent thereto in writing, and the insurance shall be obtained from an insurance company authorized by the laws of this Commonwealth to conduct business in this Commonwealth. Any benefit or return to the licensee from the sale or provision of property insurance shall not be included in the computation of the maximum charge authorized for mortgage loans under this chapter and shall not be deemed a violation of this chapter when the insurance is written pursuant to the laws of this Commonwealth governing insurance. The premium for any property insurance may be included in the principal amount of the mortgage loan requested by the consumer. However, the premium shall be disclosed as a separate item on the face of the principal contract document and the licensee's individual consumer ledger records. (5) To collect a fee for a subsequent dishonored check or instrument taken in payment, not to exceed the service charge permitted to be imposed under 18 Pa.C.S. § 4105 (relating to bad checks). (6) To collect reasonable attorney fees of an attorney at law upon the execution of the mortgage loan if the fees: (i) represent actual fees charged the licensee in connection with the mortgage loan; and (ii) are evidenced by a statement for services rendered addressed to the licensee; and (iii) are included in the principal of the mortgage loan. (7) To collect reasonable attorney fees of an attorney at law in the collection of a delinquent mortgage loan and to collect court costs incurred in the collection of the mortgage loan. (b) Mortgage brokers and loan correspondents.--Provided they are in compliance with the provisions of this chapter, mortgage brokers and mortgage loan correspondents shall have the power and authority: (1) To collect title examination, credit report and appraisal fees actually related to the making of a mortgage loan when the fees are actually paid or incurred by the licensee and to include the fees in the principal of the mortgage loan which is being negotiated or arranged. (2) To charge a broker's fee if the fee is disclosed to the consumer for whom the loan is being negotiated or arranged. (3) To accept from a licensee a fee or premium for brokering or cobrokering a mortgage loan, provided that the payment and acceptance of the fee or premium is in compliance with Federal law, including the Real Estate Settlement Procedures Act of 1974 (Public Law 93-533, 88 Stat. 1724). (Aug. 5, 2009, P.L.117, No.31, eff. imd.) 2009 Amendment. Act 31 amended subsec. (a)(1) and added subsec. (a)(6) and (7).