If you’re a nonbank mortgage loan servicer in Pennsylvania and not prepared for the new state licensing rules, you’ll need to get started soon! Governor Tom Wolf signed Pennsylvania Senate Bill 751 into law back in December last year. The bill brings a number of new rules that nonbank mortgage servicers in Pennsylvania will need to follow to operate as mortgage providers in the state.
Protecting Pennsylvania Mortgage Consumers
Pennsylvania moved to adopt these new rules and requirements to help regulate mortgage-lending activity. The new bill is designed to help protect individuals from unethical loan servicing. The state has added a number of measures that should help regulate mortgage servicers in Pennsylvania and create a more robust and ethical nonbank mortgage industry. The new measures are focused on ensuring that nonbank lenders comply with all state and federal laws. Not all mortgage servicers in Pennsylvania will be affected but it will directly impact nonbank mortgage lenders. The amendments to the existing Mortgage Licensing Act become fully effective on June 30, 2018. This is the date when state licensing becomes a mandatory requirement for nonbank servicers.
New licensing requirements
All nonbank mortgage servicers need to apply for licenses through the Department of Banking and Securities who will manage the application process. Licensing allows nonbank mortgage lenders to operate within the state. To obtain a license, the servicer must meet a set of requirements that are outlined in Pennsylvania Senate Bill 751. One of the biggest changes servicers will see take effect is the requirement for the servicer to maintain both a fidelity and a surety bond. These bonds are a requirement of licensing and the servicer will need to show evidence of both bonds in order to secure a license.
Surety bonds for nonbank mortgage servicers
The new bill states that Pennsylvania nonbank mortgage servicers will need to maintain a surety bond of $500,000. To obtain a bond the servicer should work with a bonding agency that can help them secure the right bond at the best price. Bond cost is based on a number of factors including the credit score of the applicant and the financial history of the business, but prices generally fall between 1% and 5% of the bond amount. Individuals with high credit scores and a strong business financial resume will pay less for their bond.
If you’d like help getting the bond you need to meet the new licensing requirements the experienced team at Viking Bond Service is here to help!