News Summary
Governor Josh Shapiro of Pennsylvania has signed bipartisan legislation aimed at reducing housing costs by enabling mortgage lenders to offer discount points. Known as House Bill 1103 and now Act 16 of 2025, this law will come into effect in 60 days. It modifies the Mortgage Licensing Act, allowing non-bank lenders to provide financial options that could lower monthly payments for homeowners. The law emphasizes consumer protection and aims to modernize the mortgage industry in Pennsylvania, promoting a competitive lending environment and facilitating affordable housing solutions.
Pennsylvania
Pennsylvania Governor Josh Shapiro has signed bipartisan legislation designed to lower housing costs by allowing mortgage lenders to offer discount points. This significant measure, known as House Bill 1103, has been formalized as Act 16 of 2025 and is set to take effect in 60 days.
The new law amends the Mortgage Licensing Act (MLA), clarifying that discount points can now be collected on both first and secondary mortgage loans. This change will allow non-bank mortgage lenders who are licensed by the Pennsylvania Department of Banking and Securities (DoBS) to offer such financial options to homebuyers.
With the introduction of discount points, borrowers will have the opportunity to buy down their interest rates on first and second mortgage loans, leading to potentially lower monthly payments. The legislation aims to enhance access to credit for homeowners, enabling them to manage their financial responsibilities more effectively. DoBS Secretary Wendy Spicer highlighted that these changes are expected to contribute to more affordable housing costs across the state.
Impact of the Legislation
The law is positioned to ensure consistency across state lines regarding the collection of discount points, thereby aligning Pennsylvania’s mortgage regulations with practices in other states. Its implementation is part of broader efforts to strengthen consumer protections in the state. To support this initiative, a centralized consumer protection hotline, website, and email system have been established. These resources are intended to help Pennsylvanians report scams and resolve issues related to financial services and insurance.
The bipartisan nature of the legislation reflects a collaborative effort in the state legislature, with sponsorship from Rep. Tim Twardzik, a Republican from Schuylkill County, and co-sponsorship by Rep. Morgan Cephas, a Democrat from Philadelphia. This collaboration showcases a common goal among lawmakers to modernize mortgage regulations and enhance the competitive landscape for lending.
Legislative Background
Previously, the restrictions on collecting discount points inhibited mortgage lenders from utilizing this financial strategy. By repealing these limitations, the new legislation creates an environment that promotes competition among lenders, which is expected to reduce costs for consumers. The changes specifically target the makeup of the mortgage market in Pennsylvania, seeking to support both existing homeowners and those aspiring to purchase properties.
The MLA, which governs the operation of mortgage originators and companies within the state, plays a crucial role in overseeing the origination and servicing of mortgage loans. This law marks a significant step in modernizing the regulatory framework that governs the mortgage industry in Pennsylvania, allowing for greater flexibility and innovation in mortgage offerings.
The passage of Act 16 of 2025 into law represents a forward-thinking approach to addressing the housing affordability crisis in Pennsylvania. By enabling lenders to offer discount points, the state hopes to alleviate some of the financial pressures faced by borrowers, ultimately leading to a more stable and accessible housing market.
The bill has already received approval from the House Commerce Committee and is on track for consideration by the full House. Once enacted, it is anticipated to have a lasting impact on how mortgage lending operates in Pennsylvania, providing much-needed relief to homebuyers while fostering a more competitive and innovative financial landscape.
Deeper Dive: News & Info About This Topic
- WFMJ: PA Governor Signs Legislation for Discount Points
- Wikipedia: Mortgage
- Moneywise: First-Time Home Buyer in PA
- Google Search: Pennsylvania Housing Market
- Tri State Alert: PA House on Discount Points
- Encyclopedia Britannica: Mortgage Loan
- Washington Post: Trump on Housing Costs
- Google News: Pennsylvania Mortgage Legislation
- New York Times: Trump on Interest Rates
- Google Scholar: Pennsylvania Housing Policy
