§6125. Mortgage lending authority.

(a) First mortgage loans.--Mortgage lenders engaged in the first mortgage loan business may make first mortgage loans pursuant to:

(1) the act of January 30, 1974 (P.L.13, No.6), referred to as the Loan Interest and Protection Law; or

(2) if the licensee is qualified, applicable Federal law, including the Alternative Mortgage Transaction Parity Act of 1982 (96 Stat. 1545, 12 U.S.C. § 3801 et seq.) and section 501 of the Depository Institution Deregulation and Monetary Control Act of 1980 (94 Stat. 161, 12 U.S.C. § 1735f-7a).

(b) Secondary mortgage loans.--Mortgage lenders engaged in the secondary mortgage loan business may:

(1) if the licensee is qualified, make secondary mortgage loans on terms as are permissible under applicable Federal law, including the Alternative Mortgage Transaction Parity Act of 1982; or

(2) (i) make secondary mortgage loans repayable in installments and charge, contract for and receive thereon interest at a rate not exceeding 1.85% per month. No interest shall be paid, deducted or received in advance, except that interest from the date of disbursement of funds to the consumer to the first day of the following month shall be permitted in the event the first installment payment is more than 30 days after the date of disbursement. Interest shall not be compounded and shall be computed only on unpaid principal balances. However, the inclusion of earned interest in a new note shall not be considered compounding. For the purpose of computing interest, a month shall be any period of 30 consecutive days;

(ii) charge and collect an origination fee not exceeding 3% of the original principal amount of the secondary mortgage loan. The fee shall be fully earned at the time the secondary mortgage loan is made and may be added to the principal amount of the secondary mortgage loan. No origination fee may be collected on subsequent advances made pursuant to an open-end loan if the full fee of 3% of the credit limit was collected at the time the open-end loan was made; and

(iii) charge and collect a delinquency charge of $20 or 10% of each payment, whichever is greater, for a payment which is more than 15 days late.

(Aug. 5, 2009, P.L.117, No.31, eff. imd.)

Notation

2009 Amendment.  Act 31 amended subsec. (b)(2)(ii).