Pennsylvania Act 2008-51 — MORTGAGE PROPERTY INSURANCE COVERAGE ACT - ENACTMENT

Act text

MORTGAGE PROPERTY INSURANCE COVERAGE ACT - ENACTMENT
                  Act of Jul. 4, 2008, P.L. 626, No. 51               Cl. 40

                                  AN ACT

     Regulating the amount of property insurance coverage required by
        certain lenders.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

     Section 1.  Short title.
        This act shall be known and may be cited as the Mortgage
     Property Insurance Coverage Act.
     Section 2.  Definitions.
        The following words and phrases when used in this act shall
     have the meanings given to them in this section unless the
     context clearly indicates otherwise:
        "Lender."  Any bank, savings bank, savings and loan
     association, credit union, mortgage bank, mortgage broker,
     finance company, consumer discount company or other financial
     institution or person that lends money to a borrower and secures
     the loan by a mortgage given by the borrower on real property or
     by placing a lien against real property.
        "Property insurance coverage."  Real property insurance
     covering owner-occupied private residential properties against
     losses caused by perils that commonly are covered in insurance
     policies described with terms similar to "standard fire" or
     "standard fire with extended coverage."
     Section 3.  Restriction.
        No lender may require a borrower, as a condition of obtaining
     or maintaining a secured loan, to obtain property insurance
     coverage which exceeds the replacement value of buildings and
     structures situate on the land used to secure the loan. A
     borrower on a loan secured by real property may not be required
     to insure the value of the land.
     Section 10.  Effective date.
        This act shall take effect immediately.