Legal Alert
 
 
February 18, 2009

 

Pennsylvania Department of Banking Requests Each Mortgage Licensee Prepare and Submit a Mortgage Repayment Ability Analysis Policy By FEB. 28, 2009

 

As you know, the Pennsylvania Department of Banking ("Department") has promulgated a new regulation regarding the proper conduct of the mortgage lending and brokering business in Pennsylvania.  Much of the regulation became effective on December 20, 2008.  However, the subsections which require the mortgage licensee to perform an analysis of the ability of the loan applicant to repay the prospective mortgage loan does not become until effective March 20, 2009.  The Department issued a letter announcing the regulation and providing some additional related information on December 22, 2008.  

 

The Department has issued an additional letter to mortgage lender, broker, and loan correspondent licensees, which states the following:

 

The Department is asking each licensee to submit their internal policies and
procedures on how they will perform an ability to repay analysis on their
customers to the Department no later than February 28, 2009.  This document
should be complete so that it fully and accurately details your program to comply with the requirements of ..... [the new] regulations.

 

While this Department request does not appear to be mandatory, it will likely be helpful to each licensee to be able to demonstrate compliance with this ability to repay analysis requirement by having a policy in place to show the regulators and for licensee staff to follow.
 



For additional guidance on any of these laws and issues, please contact any of the undersigned.