Pennsylvania Banking Department Increases Mortgage Enforcement Actions in 2009

HARRISBURG, Pa., Feb. 19 /PRNewswire-USNewswire/ -- The Department of Banking increased enforcement activity in the mortgage industry during 2009 as a result of regulatory reforms signed into law by Governor Edward G. Rendell in 2008.

"As a direct result of the changes in our law, we are implementing higher standards and enhancing professionalism in the mortgage industry," said Secretary of Banking Steve Kaplan. "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."

Enforcement highlights include:

• 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;
• The department revoked the licenses of or banned 28 companies and individuals from engaging in the mortgage business in Pennsylvania;
• The department issued 25 cease and desist orders against companies that were conducting either completely unlicensed activities or were harming consumers and needed to either cease business or the harmful business practice; and
• The department denied mortgage licenses to 16 individuals and 48 others surrendered their licenses or withdrew their applications rather than face revocation or denial.  

The department also 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.  

A comprehensive list of enforcement actions taken by the Department of Banking is available online at www.banking.state.pa.us. Consumers can file a complaint against any company regulated by the Department of Banking online or by calling 1-800-PA-BANKS.

Media contact: Ed Novak, 717-783-4721

SOURCE Pennsylvania Department of Banking