On February 6, 2018, the Pennsylvania Department of Banking and Securities issued draft regulations in response to the state’s recent law requiring licensing of mortgage loan servicers. The new regulations provide a great deal of information about what servicers will be required to do, but no additional guidance on exactly which entities must obtain the new license.
As we wrote previously, Pennsylvania Senate Bill 751 (also referred to as “Act 81” of 2017) amended the state’s Mortgage Licensing Act to require a person servicing mortgage loans to obtain a license. “Servicing a mortgage loan” for that purpose is defined as “collecting or remitting payment or the right to collect or remit payments of principal, interest, tax, insurance or other payment under a mortgage loan,” without limiting that phrase (and thus without limiting the licensing obligation) to servicing activity conducted only for others. As we indicated, that could be interpreted to require licensing even of persons servicing their own portfolio, unless the servicer also originated the loans (or unless an exemption otherwise applies, such as for banking institutions, their subsidiaries, or their affiliates, which are exempt from licensing upon registering). The legislation also does not indicate whether the licensing obligation applies to an entity that merely holds mortgage servicing rights without directly servicing the loans.
Unfortunately, the Department’s recent draft regulations do not provide guidance on whether such entities must obtain the license. Continue Reading Pennsylvania Drafts Mortgage Servicing Regulations to Track RESPA Requirements