Pennsylvania's Department of Banking increased enforcement activity in the mortgage industry during 2009 as a result of regulatory reforms signed into law by Gov. Edward G. Rendell in 2008, according to Secretary of Banking Steve Kaplan.
‘As a direct result of the changes in our law, we are implementing higher standards and enhancing professionalism in the mortgage industry,’ Kaplan says. ‘Pennsylvania citizens expect the individuals and companies licensed by the Department of Banking to conduct their business according to these new standards, and we are making sure that these expectations are met.’
Last year, the department suspended 542 mortgage companies and professionals for violations such as failure to obtain bonding, inadequate supervision of employees and not completing criminal background checks and education requirements.
Twenty-eight companies and individuals either were banned or had their licenses revoked by the department, and 25 cease-and-desist orders were issued against companies that "were conducting either completely unlicensed activities or were harming consumers and needed to either cease business or the harmful business practice."
The department says it also denied mortgage licenses to 16 individuals, and 48 others surrendered their licenses or withdrew their applications rather than face revocation or denial.
The department began enforcing new rules in March 2009 requiring mortgage companies to document an applicant's ability to repay the loan. A total of 17 companies were penalized for failing to develop policies to meet the requirement.