HARRISBURG – Acting Pennsylvania Banking Secretary Victoria A. Reider sent a letter today alerting the commonwealth’s mortgage companies of new guidelines outlining acceptable conduct for the state’s 3,000 lenders and brokers. The new policy is one part of the department’s larger effort to protect consumers who are working to obtain home loans.
The Department of Banking first published the guidelines in the Pennsylvania Bulletin on Dec. 16, which offers examples and definitions of practices considered to be dishonest, fraudulent, illegal, unfair, unethical, negligent or incompetent. Companies that fail to conform to the new guidelines could face suspension, revocation or non-renewal of their licenses.
“Buying a home is among the largest and most important transactions in most people’s lives,” said Reider. “This policy will help ensure that homebuyers receive the highest level of service when they’re making these important decisions that will impact their financial futures.”
In addition to the policy statement concerning proper conduct, the Department of Banking is crafting regulations and seeking legislative reforms to better protect consumers when obtaining home loans. The changes mirror those outlined in a 2005 report to the General Assembly on mortgage foreclosures in the state.
The report, “Losing the American Dream: A Report on Residential Mortgage Foreclosures and Abusive Lending Practices in Pennsylvania,” presented recommendations to curb abusive lending practices that can lead to foreclosures.
“Over the past several years, the Department of Banking has made significant strides toward protecting consumers in the mortgage marketplace,” said Reider. “We’ve added examiners, created an investigations unit, and increased our scrutiny of companies seeking to do business in the state. “We’re also providing consumers with the education they need to make informed decisions when it comes to their money. This policy statement, along with our proposed regulations and legislative reforms, will guide the mortgage industry in its business practices and will further enhance our ability to protect Pennsylvanians.”
Reider urged prospective homeowners to thoroughly research a company or broker before obtaining a mortgage. Consumers can search for Pennsylvania-
licensed entities at www.banking.state.pa.us. Consumers can also learn more about the financial aspects of homeownership in the “Housing” section of www.moneysbestfriend.com, the Pennsylvania Office of Financial Education’s Web site.
