Secretary Moyer addresses Realtors® in Harrisburg
Lenders taking a “sit tight and see” approach are not helping the overall economic picture, according to Glenn Moyer, PA Secretary of Banking.
Moyer, who spoke during PAR’s Public Policy and Political Affairs Seminar this week in Harrisburg, said, “Anything we can do to help eliminate uncertainty – on the business or regulatory side – will help us overcome the sit-tight-and-see mentality and be helpful for our economic recovery.”
Moyer addressed the state’s Mortgage Licensing Act and the federal Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act). The latter required all states to adopt a standard of licensing, indicating that making mortgage loans needs to be “habitual or repeated” in order to trigger a licensing agreement. The federal regulations did not define a minimum.
“With feedback and input from your industry and others, the Department of Banking took this position on the ‘seller financing’ issue: it is permissible for an individual to make or broker as many as three mortgage loans annually without needing to be licensed,” Moyer said. “Legislation has been developed and will be introduced soon that would make the requirement statutory.”
Other amendments proposed by the Department of Banking include:
- Exempting nonprofit corporations, such as Habitat for Humanity, from licensing requirements
- Easing branch licensing requirements to permit more business to occur outside of branch offices
- Eliminating the requirement that loan originators be W-2 employees of the mortgage lender or broker
- Clarifying provisions inserted into the Act in 2008 and 2009 that proved to be impediments to the mortgage business.
Moyer provided an update on the recent $25 billion settlement-in-principle with the nation’s five largest mortgage services over questionable service and foreclosure practices. “The settlement calls for as much as $266 million coming to Pennsylvania for loan modifications, refinance assistance and other homeowner relief,” he said. “About $66 million of this total will come in the form of a direct payment to the Attorney General’s office.”
While the settlement agreement is not final, Moyer said Gov. Tom Corbett, Pennsylvania Attorney General Linda Kelly and Moyer support sending the majority of the $66 million to the Homeowners’ Emergency Mortgage Assistance Program (HEMAP).
Moyer concluded his presentation, “As our economy recovers, we must recognize that the traditional business models that have dominated borrowing and lending are changing, just as other businesses are also adjusting to what has become known as ‘the new normal.’ In the new normal for financial services, we know that loan demand will start growing and the housing market will find a bottom and begin to rise again.”