2010 Pennsylvania Code
Title 7 - BANKS AND BANKING
Chapter 61 - Mortgage Loan Industry Licensing and Consumer Protection
6131 - Application for license.

                               SUBCHAPTER D
                 ADMINISTRATIVE AND LICENSURE PROVISIONS

     Sec.
     6131.  Application for license.
     6131.1. Prelicensing and continuing education.
     6132.  License fees.
     6133.  Issuance of license.
     6134.  License duration.
     6135.  Licensee requirements.
     6136.  Licensee limitations.
     6137.  Surrender of license.
     6138.  Authority of department.
     6139.  Suspension, revocation or refusal.
     6140.  Penalties.
     § 6131.  Application for license.
        (a)  Contents.--An application for a license under this
     chapter shall be on a form prescribed and provided by the
     department. Consistent with sections 202 E and 405 F(1) of the
     act of May 15, 1933 (P.L.565, No.111), known as the Department
     of Banking Code, all applicants and licensees shall use the
     Nationwide Mortgage Licensing System and Registry to obtain and
     maintain licenses under this chapter.
            (1)  In the case of a mortgage broker, mortgage lender or
        mortgage loan correspondent, the application shall include
        the following:
                (i)  The name of the applicant.
                (ii)  The address of the principal place of business
            of the applicant and the address or addresses where the
            applicant's mortgage loan business is to be conducted.
                (iii)  The full name, official title and business
            address of each director and principal officer of the
            mortgage loan business.
                (iv)  Any other information that may be required by
            the department.
            (2)  In the case of a mortgage originator, the
        application shall include the following:
                (i)  The name of the applicant.
                (ii)  The name of the employer licensee of the
            applicant and location of the employer licensee to which
            the applicant is assigned.
                (iii)  Any other information that may be required by
            the department.
            (3)  An applicant shall demonstrate to the department
        that policies and procedures have been developed to receive
        and process consumer inquiries and grievances promptly and
        fairly.
        (b)  Duty to update.--All applicants and licensees shall be
     required to provide the department with written notice of the
     change in any information contained in an application for a
     license or for any renewal of a license within ten days of an
     applicant or licensee becoming aware of the change.
        (c)  Mortgage lender license.--The department shall issue a
     mortgage lender license applied for under this chapter if the
     applicant has:
            (1)  Been approved by or meets the current criteria for
        approval of at least one of the following:
                (i)  Federal National Mortgage Association.
                (ii)  Federal Home Loan Mortgage Corporation.
                (iii)  Federal Housing Administration.
            (2)  Been approved for and will continue to maintain as a
        licensee a line of credit, repurchase agreement or equivalent
        mortgage-funding capability of not less than $1,000,000.
            (3)  Established a minimum net worth of $250,000 at the
        time of application and will, at all times thereafter,
        maintain the minimum net worth.
            (4)  Been approved for and will continue to maintain as a
        licensee fidelity bond coverage in accordance with the
        guidelines established by the Federal National Mortgage
        Association or the Federal Home Loan Mortgage Corporation.
            (5)  Obtained and will maintain a surety bond in an
        amount that will provide coverage for the mortgage
        originators employed by the applicant or licensee, in a form
        acceptable to the department, prior to the issuance of the
        license, from a surety company authorized to do business in
        this Commonwealth. The following shall apply:
                (i)  The amount of the bond shall be:
                    (A)  $100,000 for an applicant or licensee whose
                mortgage originators will originate or originated
                less than $30,000,000 in mortgage loans secured by
                Pennsylvania real property in a calendar year;
                    (B)  $200,000 for an applicant or licensee whose
                mortgage originators will originate or originated
                $30,000,000 to $99,999,999.99 in mortgage loans
                secured by Pennsylvania real property in a calendar
                year;
                    (C)  $300,000 for an applicant or licensee whose
                mortgage originators will originate or originated
                $100,000,000 to $249,999,999.99 in mortgage loans
                secured by Pennsylvania real property in a calendar
                year; and
                    (D)  $500,000 for an applicant or licensee whose
                mortgage originators will originate or originated
                $250,000,000 or more in mortgage loans secured by
                Pennsylvania real property in a calendar year.
                (ii)  For an initial license applicant, the amount of
            the bond shall be determined by the applicant's
            anticipated amount of mortgage loans secured by
            Pennsylvania residential real estate originated by its
            mortgage originators in the first calendar year of
            licensing. For a licensee, the amount of the bond shall
            be determined annually by the department based upon the
            amount of mortgage loans secured by Pennsylvania
            residential real estate originated by the licensee's
            mortgage originators as indicated on the licensee's
            annual report.
                (iii)  The bond shall run to the Commonwealth and
            shall be for the use of the Commonwealth and for the use
            of any consumer who is injured by the acts or omissions
            of the licensee's mortgage originators that are related
            to the mortgage loan business regulated by this chapter.
            No bond shall comply with the requirements of this
            section unless it contains a provision that it shall not
            be canceled for any cause unless notice of intention to
            cancel is given to the department at least 30 days before
            the day upon which cancellation shall take effect.
            Cancellation of the bond shall not invalidate the bond
            regarding the period of time it was in effect.
        (d)  Mortgage loan correspondent license.--The department
     shall issue a loan correspondent's license applied for under
     this chapter if the applicant:
            (1)  Obtains and will maintain a bond in the amount of
        $100,000, in a form acceptable to the department, prior to
        the issuance of the license, from a surety company authorized
        to do business in this Commonwealth. The bond shall run to
        the Commonwealth and shall be for the use of the Commonwealth
        and any person or persons who obtain a judgment against the
        mortgage loan correspondent for failure to carry out the
        terms of any provision for which advance fees are paid. No
        bond shall comply with the requirements of this section
        unless it contains a provision that it shall not be canceled
        for any cause unless notice of intention to cancel is given
        to the department at least 30 days before the day upon which
        cancellation shall take effect. A mortgage loan correspondent
        who can demonstrate to the satisfaction of the department
        that the correspondent does not and will not accept advance
        fees shall be exempt from the bond requirement of this
        paragraph.
            (2)  Establishes a minimum net worth of $100,000 at the
        time of application and will, at all times thereafter,
        maintain the minimum net worth.
            (3)  Obtains and will maintain a surety bond in an amount
        that will provide coverage for the mortgage originators
        employed by the applicant or licensee, in a form acceptable
        to the department, prior to the issuance of the license, from
        a surety company authorized to do business in this
        Commonwealth. The following shall apply:
                (i)  The amount of the bond shall be $100,000 for an
            applicant or licensee whose mortgage originators will
            originate or originated less than $30,000,000 in mortgage
            loans secured by Pennsylvania residential real estate in
            a calendar year; $200,000 for an applicant or licensee
            whose mortgage originators will originate or originated
            $30,000,000 to $99,999,999.99 in mortgage loans secured
            by Pennsylvania residential real estate in a calendar
            year; $300,000 for an applicant or licensee whose
            mortgage originators will originate or originated
            $100,000,000 to $249,999,999.99 in mortgage loans secured
            by Pennsylvania residential real estate in a calendar
            year; and $500,000 for an applicant or licensee whose
            mortgage originators will originate or originated
            $250,000,000 or more in mortgage loans secured by
            Pennsylvania residential real estate in a calendar year.
                (ii)  For an initial license applicant, the amount of
            the bond shall be determined by the applicant's
            anticipated amount of mortgage loans secured by
            Pennsylvania residential real estate originated by its
            mortgage originators in the first calendar year of
            licensing. For a licensee, the amount of the bond shall
            be determined annually by the department based upon the
            amount of mortgage loans secured by Pennsylvania
            residential real estate originated by the licensee's
            mortgage originators as indicated on the licensee's
            annual report.
                (iii)  The bond shall run to the Commonwealth and
            shall be for the use of the Commonwealth and for the use
            of any consumer who is injured by the acts or omissions
            of the licensee's mortgage originators that are related
            to the mortgage loan business regulated by this chapter.
            No bond shall comply with the requirements of this
            section unless it contains a provision that it shall not
            be canceled for any cause unless notice of intention to
            cancel is given to the department at least 30 days before
            the day upon which cancellation shall take effect.
            Cancellation of the bond shall not invalidate the bond
            regarding the period of time it was in effect.
        (e)  Mortgage broker license.--
            (1)  The department shall issue a mortgage broker license
        applied for under this chapter if the applicant obtains and
        will maintain a bond in the amount of $100,000, in a form
        acceptable to the department, prior to the issuance of the
        license, from a surety company authorized to do business in
        this Commonwealth. The bond shall be a penal bond conditioned
        on compliance with this chapter and subject to forfeiture by
        the department and shall run to the Commonwealth for its use.
        The bond shall also be for the use of any person against the
        mortgage broker for failure to carry out the terms of any
        provision for which advance fees are paid. If the person is
        aggrieved, the person may, with the written consent of the
        department, recover advance fees and costs from the bond by
        filing a claim with the surety company or maintaining an
        action on the bond. In the alternative, an aggrieved person
        may recover advance fees and costs by filing a formal
        complaint against the mortgage broker with the department
        which shall adjudicate the matter. The adjudication shall be
        binding upon the surety company and enforceable by the
        department in Commonwealth Court and by an aggrieved person
        in any court. Any aggrieved person seeking to recover advance
        fees and costs from a bond that has already been forfeited by
        the department or which the department is in the process of
        forfeiting may recover payment on the bond if, after filing a
        petition with the department, the department consents to the
        aggrieved person's requested payment or portion thereof. The
        department may pay the aggrieved person from the bond
        proceeds it recovers. Nothing in this section shall be
        construed as limiting the ability of any court or magisterial
        district judge to award to any aggrieved person other
        damages, court costs and attorney fees as permitted by law,
        but those claims that are not advance fees or related costs
        may not be recovered from the bond. The department, in its
        discretion, may consent to or order pro rata or other
        recovery on the bond for any aggrieved person if claims
        against the bond may or do exceed its full monetary amount.
        No bond shall comply with the requirements of this section
        unless it contains a provision that it shall not be canceled
        for any cause unless notice of intention to cancel is given
        to the department at least 30 days before the day upon which
        cancellation shall take effect. Cancellation of the bond
        shall not invalidate the bond regarding the period of time it
        was in effect.
            (2)  Mortgage brokers who can demonstrate to the
        satisfaction of the department that they do not and will not
        accept advance fees shall be exempt from the bond requirement
        of paragraph (1).
            (3)  A mortgage broker shall obtain and maintain a surety
        bond in an amount that will provide coverage for the mortgage
        originators employed by the applicant or licensee, in a form
        acceptable to the department, prior to the issuance of the
        license, from a surety company authorized to do business in
        this Commonwealth. The following shall apply:
                (i)  The amount of the bond shall be $50,000 for an
            applicant or licensee whose mortgage originators will
            originate or originated less than $15,000,000 in mortgage
            loans secured by Pennsylvania residential real estate in
            a calendar year; $75,000 for an applicant or licensee
            whose mortgage originators will originate or originated
            $15,000,000 to $29,999,999.99 in mortgage loans secured
            by Pennsylvania residential real estate in a calendar
            year; $100,000 for an applicant or licensee whose
            mortgage originators will originate or originated
            $30,000,000 to $49,999,999.99 in mortgage loans secured
            by Pennsylvania residential real estate in a calendar
            year; and $150,000 for an applicant or licensee whose
            mortgage originators will originate or originated
            $50,000,000 or more in mortgage loans secured by
            Pennsylvania residential real estate in a calendar year.
                (ii)  For an initial license applicant, the amount of
            the bond shall be determined by the applicant's
            anticipated amount of mortgage loans secured by
            Pennsylvania residential real estate originated by its
            mortgage originators in the first calendar year of
            licensing. For a licensee, the amount of the bond shall
            be determined annually by the department based upon the
            amount of mortgage loans secured by Pennsylvania
            residential real estate originated by the licensee's
            mortgage originators as indicated on the licensee's
            annual report.
                (iii)  The bond shall run to the Commonwealth and
            shall be for the use of the Commonwealth and for the use
            of any consumer who is injured by the acts or omissions
            of the licensee's mortgage originators that are related
            to the mortgage loan business regulated by this chapter.
            No bond shall comply with the requirements of this
            section unless it contains a provision that it shall not
            be canceled for any cause unless notice of intention to
            cancel is given to the department at least 30 days before
            the day upon which cancellation shall take effect.
            Cancellation of the bond shall not invalidate the bond
            regarding the period of time it was in effect.
        (f)  Mortgage originator license.--A mortgage originator
     shall do all of the following:
            (1)  Be an employee of a single licensed mortgage broker,
        mortgage lender or mortgage loan correspondent, a person
        excepted from this chapter or a person excepted from
        licensure under section 6112 (relating to exceptions to
        license requirements). The licensee or person shall directly
        supervise, control and maintain responsibility for the acts
        and omissions of the mortgage originator.
            (2)  Be assigned to and work out of a licensed location
        of the employer licensee or a location of an employer person
        excepted from this chapter or excepted from licensure under
        section 6112.
            (3)  Maintain a valid unique identifier issued by the
        Nationwide Mortgage Licensing System and Registry.
            (4)  If a person excepted from this chapter or excepted
        from licensure under section 6112 does not elect to maintain
        bond coverage for its mortgage originators in the same manner
        as a mortgage lender, a mortgage originator employed by a
        person excepted from this chapter or excepted from licensure
        under section 6112 shall obtain and maintain a surety bond in
        an amount that will provide coverage for the mortgage
        originator, in a form acceptable to the department, prior to
        the issuance of the license, from a surety company authorized
        to do business in this Commonwealth. The following shall
        apply:
                (i)  The amount of the bond shall be $25,000 for an
            applicant or licensee who will originate or originated
            less than $7,500,000 in mortgage loans secured by
            Pennsylvania residential real estate in a calendar year;
            $50,000 for an applicant or licensee who will originate
            or originated $7,500,000 to $14,999,999.99 in mortgage
            loans secured by Pennsylvania residential real estate in
            a calendar year; $75,000 for an applicant or licensee who
            will originate or originated $15,000,000 to
            $29,999,999.99 in mortgage loans secured by Pennsylvania
            residential real estate in a calendar year; $100,000 for
            an applicant or licensee who will originate or originated
            $30,000,000 to $49,999,999.99 in mortgage loans secured
            by Pennsylvania residential real estate in a calendar
            year; and $150,000 for an applicant or licensee who will
            originate or originated $50,000,000 or more in mortgage
            loans secured by Pennsylvania residential real estate in
            a calendar year.
                (ii)  For an initial license applicant, the amount of
            the bond shall be determined by the applicant's
            anticipated amount of mortgage loans secured by
            Pennsylvania residential real estate originated in the
            first calendar year of licensing. For a licensee, the
            amount of the bond shall be determined annually by the
            department based upon the amount of mortgage loans
            secured by Pennsylvania residential real estate
            originated by the mortgage originator as indicated on the
            mortgage originator's annual report.
                (iii)  The bond shall run to the Commonwealth and
            shall be for the use of the Commonwealth and for the use
            of any consumer who is injured by the acts or omissions
            of the mortgage originator that are related to the
            mortgage loan business regulated by this chapter. No bond
            shall comply with the requirements of this section unless
            it contains a provision that it shall not be canceled for
            any cause unless notice of intention to cancel is given
            to the department at least 30 days before the day upon
            which cancellation shall take effect. Cancellation of the
            bond shall not invalidate the bond regarding the period
            of time it was in effect.
        (g)  Nationwide Mortgage Licensing System and Registry
     information challenge process.--A mortgage originator applicant
     or licensee may challenge the accuracy of information entered by
     the department to the Nationwide Mortgage Licensing System and
     Registry regarding the mortgage originator applicant or licensee
     by filing a written complaint with the department. The
     department shall review the complaint and alleged inaccurate
     information on the Nationwide Mortgage Licensing System and
     Registry and notify the applicant or licensee of corrective
     action taken by the department regarding the alleged inaccurate
     information within 30 days of receipt of the complaint.
        (h)  License renewals.--Licenses shall be issued for terms of
     12 months and may be renewed by the department each year on a
     schedule set by the department upon application by the licensee
     and the payment of any and all applicable renewal fees. The
     licensee shall demonstrate to the department that it is
     conducting the mortgage loan business in accordance with the
     requirements of this chapter and that the licensee or directors,
     officers, partners, employees, agents and ultimate equitable
     owners of 10% or more of the licensee continue to meet all of
     the initial requirements for licensure required by this chapter
     unless otherwise determined by the department.
        (i)  Out-of-State applicants.--
            (1)  If an applicant is not a resident of this
        Commonwealth, as a condition to receiving a license under
        this chapter, the applicant shall be authorized to do
        business in this Commonwealth in accordance with the laws of
        this Commonwealth regulating corporations and other entities
        conducting business in this Commonwealth and shall maintain
        at least one office which is the office that shall be
        licensed as the principal place of business for the purposes
        of this chapter.
            (2)  Out-of-State applicants shall file with the license
        application an irrevocable consent, duly acknowledged, that
        suits and actions may be commenced against that person in the
        courts of this Commonwealth by the service of process of any
        pleading upon the department in the usual manner provided for
        service of process and pleadings by the laws and court rules
        of this Commonwealth. The consent shall provide that this
        service shall be as valid and binding as if service had been
        made personally upon the person in this Commonwealth. In all
        cases where process or pleadings are served upon the
        department under the provisions of this section, the process
        or pleadings shall be served in triplicate; one copy shall be
        filed in the department's offices and the others shall be
        forwarded by the department, by certified or registered mail,
        return receipt requested, to the last known principal place
        of business of the person.
        (j)  Disclosure of mortgage originator information.--
     Notwithstanding section 302 of the act of May 15, 1933 (P.L.565,
     No.111), known as the Department of Banking Code, the department
     shall make available to the public, including by access to the
     Nationwide Mortgage Licensing System and Registry, the
     employment history of a mortgage originator.
     (Aug. 5, 2009, P.L.117, No.31, eff. imd.)

        2009 Amendment.  Act 31 amended subsecs. (a) intro. par.,
     (c)(3), (d), (e)(2), (f), (g), (h) and (i)(1) and added subsecs.
     (c)(5), (e)(3) and (j).
        Cross References.  Section 6131 is referred to in sections
     6112, 6134, 6139 of this title.