January 1st, 2018 brought new effective legislation to mortgage servicers and the additional requirement of a Pennsylvania mortgage loan servicer bond. Per the Department of Banking and Securities, anyone servicing a Pennsylvania mortgage without applying fpr the appropriate license and filing the corresponding surety bond will be considered unlicensed and subject to enforcement action. A "mortgage servicer" is statutorily defined as a person (entity) who engages in the mortgage loan business by directly or indirectly, servicing a mortgage loan. This is a broad definition which effectively brings all industry participants under regulatory control.
Pursuant to PA §6131 (k)(4), (4) (an applicant) must file and maintain a mortgage loan servicer bond in an amount that will provide coverage for the mortgage servicer 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. (i) The amount of the bond shall be $500,000. (ii) The bond shall run to the Commonwealth and shall be for the use of the Commonwealth and for the use of the consumer who is injured by the acts or omissions of the licensee's mortgage originators that are related to the mortgage loan business regulated under this chapter. A bond shall not comply with the requirements of this section unless the bond contains a provision that the bond shall not be canceled for any cause unless notice of intention to cancel is given to the department at least 30 days, excluding legal holidays, Saturdays and Sundays, before the day upon which cancellation shall take effect. Cancellation of the Pennsylvania mortgage loan servicer bond shall not invalidate the bond regarding the period of time the bond was in effect.
In addition to the new surety bond requirement there are specific codes of conduct of which each mortgage loan servicer should be aware. The Administrative Codes may be reviewed here. Questions about licensing and compliance may be sent to the Department at firstname.lastname@example.org.
National surety leader, Surety One, Inc. is a specialist in the bonding needs of the mortgage loan origination and servicing industry. We offer both the surety and fidelity bonds required of mortgage professionals in ALL fifty states, Puerto Rico and the U.S. Virgin Islands. Do you operate in multiple states? View our state-by-state report of mortgage broker bond requirements on our commercial surety bond page. Call us at (800) 373-2804, email us at Underwriting@SuretyOne.com or click here for live chat to discuss a mortgage broker surety bond application or information on ANY surety or fidelity bond need.
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