Regulatory Alerts2005-06-01
Department of Banking Position on Licensing for Secondary Market Investment in Partially-Drawn HELOCs
The Pennsylvania Department of Banking issued this letter to clarify that an out-of-state investor purchasing partially-drawn home equity lines of credit is not required to obtain licenses under the Mortgage Bankers and Brokers and Consumer Equity Protection Act or the Secondary Mortgage Loan Act. The Department determined that the investor qualifies for the statutory exception for persons holding loans solely as investments and does not engage in the first or secondary mortgage loan business. While the investor is exempt, the letter confirms that the originating lender, servicer, and trustee must remain licensed under the applicable Pennsylvania statutes to originate, service, or hold these loans.
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