PA. DEPT. OF BANKING WANTS TO END STATED AND NO-INCOME VERIFICATION MORTGAGES

If you have a stated income or no income verification loan anywhere in the State of Pennsylvania that will be be converting from a fixed rate to an adjustable rate mortgage, please read this. If the Department of Banking is successful in enacting this new proposal you may be unable to qualify for a mortgage when your fixed rate loan becomes a much higher rate adjustable rate. This is an email that I received today from PAMB.
PLEASE READ THIS:

Dear Fellow PAMB Member,

On July 5, the Pennsylvania Department of Banking (DOB) proposed new mortgage regulations to the commonwealth's Independent Regulatory Review Commission (IRRC). Although new regulations have the well-intentioned goal of protecting consumers in mind, several of the items that they include will have little impact on consumer protection and several negative ramifications on the industry as a whole.

From our perspective, the most onerous regulation is the termination of stated-income and no-doc loans. As you know, stated-income and no-doc loans have their appropriate place in the market when utilized correctly. It is our contention that the loans themselves are not the problem, but rather a small percentage of inept or immoral loan originators who are suggesting inappropriate loans to people who cannot afford them in addition to what have always been the main reasons for foreclosure - loss of job, divorce, sudden illness and other unexpected lifestyle changes.

Fortunately, there is something that you can do to affect the situation. We encourage you to submit an official comment to the Pennsylvania Department of Banking stating your opposition to the regulations.

Here's How:

The proposed regulation is available at the DOB's Web site and was published in the Pennsylvania Bulletin on July 21. Its publication started the clock ticking on two separate 30-day comment periods. During the first comment period - which ends on Monday, Aug. 20 - interested citizens and organizations may submit questions, comments, concerns and/or suggested improvements to:

Pennsylvania Department of Banking
Attn: Office of Chief Counsel
17 North Second Street · Suite 1300
Harrisburg, PA 17101
Fax: (717) 783-8427

All comments become part of the public record and are forwarded to the commission and to the appropriate legislative committees. As part of the promulgation process, the DOB will also prepare written responses to comments received. During the second comment period - which ends on Wednesday, Sept. 19 - the IRRC will use its own analysis as well as citizens' comments to provide the DOB with an assessment of the proposal. The IRRC is comprised of five commissioners that review proposed and final regulations from Pennsylvania state agencies to make certain that agencies have the statutory authority to enact the regulations and determine whether regulations are consistent with legislative intent.

Specifically, commissioners evaluate:


Whether the agency has statutory authority to implement the regulation
Whether the regulation is consistent with the legislative intent
Economic and fiscal impact on the public and private sectors
Protection of the public health, safety and welfare
Clarity, feasibility and reasonableness of the regulation
Whether the regulation represents a policy decision requiring legislative review
Comments, objections or recommendations of a committee
Compliance with the Regulatory Review Act and IRRC regulations
After the DOB receives, evaluates and responds to all comments, it will determine if any changes need to be made to the proposed regulatory language. If so, a final version will be provided to the IRRC and published in the Pennsylvania Bulletin. For those who might not be aware, the legislative standing committees with relevant jurisdiction in this instance are the state Senate Banking and Insurance, and the House Commerce committees. The legislative committees may provide comments to the DOB at any time up until its submission of the regulation in final form. In addition, a public meeting will be scheduled and hosted by the IRRC. Citizens and organizations may attend and participate in the public meeting.

Should they wish to speak, they should:


Watch the Pennsylvania Bulletin and DOB's Web site ( www.banking.state.pa.us ) for the meeting date, time and location
Call the commission to indicate an interest in speaking
Select a single spokesperson, if representing an organization
Speak to the content and relevancy of the regulation
Limit comments to five minutes
Bring 10 written copies of comments to the hearing.
After the public hearing, the IRRC will approve or disapprove the regulation. In the event of disapproval, the DOB may resubmit the regulation with revisions within 40 days or submit the regulation without revisions to the General Assembly.

The PAMB appreciates your help and support during these complicated and challenging times. We will continue to keep our membership updated and informed through every step of the process. If you have any questions, please feel free to contact PAMB Legislative Chair Jim Bulger at 412-298-8383.

Sample Letter

Best Regards,

Jim Bulger
PAMB Legislative Chair



PAMB

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