Pennsylvania Statutes Title 63 P.S. Professions and Occupations (State Licensed) § 456.511. Limitations on covered loan terms

(a) Limitation of balloon payment.--No covered loan may contract for a scheduled payment that is more than twice as large as the average of earlier scheduled monthly payments unless such balloon payment becomes due and payable not less than 120 months after the date of the loan. This prohibition does not apply when the payment scheduled is adjusted to account for the seasonal or irregular income of the obligor or if the purpose of the loan is a bridge loan connected with or related to the acquisition or construction of a dwelling intended to become the obligor's principal dwelling.

(b) No call provision.--No covered loan may contain a call provision that permits the lender in its sole discretion to accelerate the indebtedness. This prohibition does not apply when repayment of the loan has been accelerated:

(c) No negative amortization.--Except for loans to obligors with gross income in excess of 150% of median family income, no covered loan may contract for a payment schedule with regular periodic payments that cause the principal balance to increase. This subsection shall not prohibit negative amortization as a consequence of a temporary forbearance or restructure consented to by the obligor.

(d) No increased interest rate upon default.--No covered loan may contract for any increase in the interest rate as a result of a default. This provision shall not apply to periodic interest rate changes in a variable rate loan otherwise consistent with the provisions of the loan agreement provided the change in the interest rate is not occasioned by the event of default or permissible acceleration of the indebtedness.

(e) No advance payments.--No covered loan may include terms under which any periodic payments required under the loan are paid in advance from the loan proceeds.

(f) Limitations on prepayment fees.--The following limitation on prepayment fees shall be observed: