Remote loan originations now offered permanently in Pennsylvania

Pennsylvania has made remote loan originations easier, as Governor Tom Wolf signed new legislation that grants permanent work-from-home options for mortgage originators.

The passage of House Bill 1588 will now permit loan originators working for nonbank lenders the opportunity to conduct business from remote offices, including private homes, which meet security and consumer-protection standards. The new law also removes a prior stipulation that mandated originators to live within 100 miles from the nearest licensed branch.

Prior to passage of the bill, which was introduced by state Rep. Rob Mercuri, nonbank lending originators working in Pennsylvania were required to be assigned to licensed offices or branches, with all business transactions conducted in those locations. The rules were temporarily waived in Pennsylvania, as well as several other states, in the early stages of the coronavirus pandemic. The state’s new guidelines regarding remote work went into effect immediately after the bill’s signing on Feb. 3.

“Nearly half of the Commonwealth’s citizens live in areas where there is not a readily accessible physical branch location to originate their home loan,” Mercuri said in a statement. “As our economy and business practices change with the times, our laws and regulations must adapt and change as well.”

Pennsylvania’s Department of Banking and Securities regulates more than 22,000 loan officers and 3,500 nonbank lenders, according to its secretary Richard Vague.

The Community Home Lenders Association welcomed the news. The association has long lobbied for permanent authorizations of work-from-home options. Last year, the organization wrote a letter to the Conference of State Bank Supervisors calling for the rules in place prior to the pandemic regarding work locations for nonbank mortgage officers to be modified. The letter proposed guidelines to both accommodate remote work while providing regulators with assurance that business conducted would remain safe.

“CHLA commends the Commonwealth of Pennsylvania for adopting this common-sense legislation to make permanent the temporary work-at-home flexibilities for mortgage loan originators adopted in the wake of COVID,” the association said in an issued statement.

“The experience over the last two years of COVID shows that nonbank mortgage loan originators can do their work from home, while fully protecting consumers in the process.”

In addition to relaxing remote-work restrictions, the bill’s passage removes the “mortgage loan correspondent” licensing category, aligning Pennsylvania with other states. The new legislation also adds language clarifying that state nonbank servicing regulations do not apply to reverse mortgages, as well as eliminates duplicate licensure, regulation and exam requirements for installment sellers who assist consumers with financing of manufactured and mobile homes when the dealer is already licensed under the Consumer Credit Code.