On Feb. 18, 2025, MD BANK issued regulatory alert as follow-up to January guidance.
Industry stakeholders expressed concerns that licensing requirements create unique challenges for passive trusts and role they serve by providing liquidity to market.
Some industry members have responded by suspending mortgage operations in MD.
To address concerns and ensure consumers enjoy advantages, MD developed proposed legislation, the Maryland secondary market stability act of 2025, SB 1026/HB 1516.
Designed to provide licensing exemption from requirements for entities that acquire mortgage, installment loans by assignment but do not originate loans on their behalf.
The legislation, as drafted, would take effect immediately upon its enactment.
MD BANK is extending the enforcement deadline from Apr. 10, 2025, to Jul. 6, 2025.
On Jan. 10, MD BANK issued guidance on mortgage trust licensing.
MD BANK issued guidance on licensing obligations for mortgage trusts and regulations.
Guidance clarified the applicability of licensing requirements under Maryland law for persons engaged in mortgage lending, including mortgage trusts and their assignees.
Guidance reflects decision in Estate of Brown v. Ward, 261 Md. App. 385 (2024).
This applies to all mortgage loans, including those that elect credit grantor revolving credit provisions (OPEC) and credit grantor closed-end credit provisions (CLEC).
Licensing applies to all assignees of mortgage loans unless expressly exempted.
Mortgage trusts must comply with licensing requirements per emergency regulations.
Applicable persons must audit existing portfolios to determine if they hold the proper licenses for any assigned mortgage loan agreements and designate a principal officer.
Emergency Regulation
To facilitate compliance with Estate of Brown, MD BANK has promulgated emergency regulations that expire on Jun. 16, 2025 with same rules as permanent regulations.
Emergency regulations enable mortgage trust licensing and clarify licensing procedures
Also, simplify net worth requirements to establish practical means of compliance.
Effectiveness
OFR compliance with applicable licensing requirements delayed until Apr. 10, 2025.
Jan. 31, 2025 MD BANK Supplemental Guidance
On Jan. 31, 2025, MD BANK issued supplemental guidance clarifying licensing requirements for federal agencies conducting mortgage lending and their assignees.
Existing licensing statutes contain specific exemptions and exclusions, and neither the Brown decision, nor OFR guidance, overrides these statutory exemptions/exclusions.
Especially as they relate to corporate instrumentalities of the Unite States government.
Clarifies exclusions from the definition of a mortgage lender and provision exclusions.
Trusts created by Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, Government National Mortgage Association not subject to OFR licensure.
Feb. 2025 MD BANK Extended Deadline
On Feb. 18, 2025, MD BANK issued regulatory alert as follow-up to January guidance.
Industry stakeholders expressed concerns that licensing requirements create unique challenges for passive trusts and role they serve by providing liquidity to market.
Some industry members have responded by suspending mortgage operations in MD.
To address concerns and ensure consumers enjoy advantages, MD developed proposed legislation, the Maryland secondary market stability act of 2025, SB 1026/HB 1516.
Designed to provide licensing exemption from requirements for entities that acquire mortgage, installment loans by assignment but do not originate loans on their behalf.
The legislation, as drafted, would take effect immediately upon its enactment.
MD BANK is extending the enforcement deadline from Apr. 10, 2025, to Jul. 6, 2025.
