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09.03.06.00.htm 09.03.06.00. Title 09 MARYLAND DEPARTMENT OF LABOR Subtitle 03 COMMISSIONER OF FINANCIAL REGULATION Chapter 06 Mortgage Lenders Authority: Business Regulation Article, §2-105; Financial Institutions Article, §2-105.1, 11-503, 11-503.1, 11-505, 11-506(a) and (c)1) 11-507, 11-508(g) 11-511, 11-511.1, 11-513(a) and 11-515(c) Real Property Article, §3-104.1; Annotated Code of Maryland
09.03.06.01.htm 09.03.06.01. 01 Scope.. This chapter governs the conduct of any person engaged in mortgage lending, mortgage brokering, or mortgage servicing of loans secured by residential real estate located in this State, unless specifically exempt from licensure under Financial Institutions Article, §11-502, Annotated Code of Maryland.
09.03.06.02.htm 09.03.06.02. 02 Definitions.. A. In this chapter, the following terms have the meanings indicated.. B. Terms Defined.. 1) "Advertisement" means a statement in any medium used or intended to induce any person to apply for a mortgage loan.2) "Annual percentage rate (APR) has the meaning stated in 12 CFR Part 1026, as it may be amended from time to time.3) Applicant.. a) "Applicant" means a borrower who has not received a commitment from a licensee to make the loan requested.
09.03.06.03.htm 09.03.06.03. 03 Delivery and Receipt of Mortgage Disclosures.. A. A licensee shall be deemed to have complied with a requirement under Commercial Law Article, Title 12, Subtitles 1, 3, 4, 8, 9, or 10, Annotated Code of Maryland, to provide a written disclosure or agreement within a specified time period after the date the loan application is completed if the mortgage disclosure or agreement is provided to an applicant in person, or placed in the mail, before the end of the time perio
09.03.06.04.htm 09.03.06.04. 04 Licensing and Application Requirements.. A. Scope.. 1) If otherwise required to be licensed under Financial Institutions Article, §11-502, Annotated Code of Maryland, a person is not exempt because the person:a) Is an out-of-State deposit-taking financial institution;. b) Does not have offices in Maryland;. c) Does not have tax situs in Maryland; or. d) Is not required to register as a foreign corporation doing business in Maryland.. 2) Repealed.. 3) For purposes of Financ
09.03.06.05.htm 09.03.06.05. 05 Records.. A. Preservation of Records.. 1) A licensee shall preserve the records of a mortgage loan in one or more of the following ways:. a) Original books, accounts, and files;. b) An approved electronic equivalent; or. c) An approved microphotographic copy.. 2) A licensee’s use of electronic or microphotographic preservation of records, or storage of books and records at a location other than the licensee’s place of business, shall be considered approved
09.03.06.06.htm 09.03.06.06. 06 Advertising and Solicitation.. A. A person may not publish, or cause to be published, any advertisement, or make or cause to be made any representation, that:1) Contains any false, misleading, or deceptive statements regarding the making, brokering, or servicing of mortgage loans; or2) Misrepresents terms, availability, rates, or charges incident to a mortgage loan.. B. Licensee Name and Address..
09.03.06.07.htm 09.03.06.07. 07 Financing Agreements.. A. For purposes of Commercial Law Article, §12-125, 12-922, and 12-1022, Annotated Code of Maryland:. 1) An application is completed at the time of initial application;. 2) Settlement occurs when the loan proceeds are disbursed by the person conducting settlement to the borrower or to third parties as required by the lender's instructions;3) Settlement has not occurred when the loan proceeds are disbursed from the lender to the custody o
09.03.06.08.htm 09.03.06.08. 08 Agreements with the Borrower.. A. Written Agreements.. 1) Agreements between a borrower and a licensee shall be:. a) In writing; and. b) Provided promptly to the borrower following execution by all parties.. 2) Exact copies of original documents may be provided to the borrower to satisfy this section.. B. Agreements in Blank.. 1) A person may not obtain a borrower's or guarantor's signature on any of the following documents if blanks remain to be filled in after execution by
09.03.06.09.htm 09.03.06.09. 09 Loan Processing.. A. A mortgage lender:. 1) May not cause or permit any loan to be characterized as a commercial loan if there are circumstances known to the licensee which indicate that any portion of the loan proceeds will not be used for commercial purposes;2) Which cannot guarantee acceptance of a borrower's application into a particular loan program, shall disclose that fact to the applicant in writing;3) Shall keep an applicant generally informed of t
09.03.06.10.htm 09.03.06.10. 10 Fees.. A. A licensee may not retain a fee, or any portion of a fee, collected from the borrower if the fee is represented as a charge to be paid to a third party for services in connection with the loan.B. Timing of Collection.. 1) If a financing agreement is required under Commercial Law Article, §12-125, 12-922, or 12-1022, Annotated Code of Maryland, and these regulations, a licensee may not collect any fee from the applicant before providing the financing agreement execu
09.03.06.11.htm 09.03.06.11. 11 Closing.. A. Disbursement of Loan Proceeds.. 1) A licensee shall disburse all loan proceeds in a timely manner as provided in the loan documents.. 2) Disbursement of all loan proceeds to a third-party closing agent is deemed compliance with this section.B. A licensee may not collect a separate settlement fee in a loan when closing is conducted by:. 1) The lender;. 2) A subsidiary of the lender;. 3) A sister corporation of the lender;. 4) An owner or part owner of the lender;.
09.03.06.12.htm 09.03.06.12. 12 Brokers.. A. A person acting as a mortgage broker in a loan transaction may not obtain an exclusive dealing or exclusive agency agreement from any borrower.B. Notwithstanding §A of this regulation, a person acting as a mortgage broker may obtain an agreement from a borrower that, in the event the loan is not made, restricts the borrower from obtaining a loan within 180 days after the borrower's initial application to the broker, from any lender identified to the borrower by th
09.03.06.13.htm 09.03.06.13. 13 Expedition.. A. A licensee shall act expeditiously in processing and underwriting loan applications.. B. A licensee may not:. 1) Issue any agreement that locks in or sets an interest rate and points on the loan applied for, if the licensee knows that the time period established in the agreement after which the rate may change is not sufficient for the loan to be closed;2) Accept more applications than the licensee can reasonably expect to be processed and closed withi
09.03.06.14.htm 09.03.06.14. 14 Payoff and Accounting Statements ― Releases.. A. Within 5 business days after written request by the borrower, a licensee shall provide the borrower or the borrower's designee with a written statement of the dollar figure which will repay a loan in full.B. Upon written request by the borrower, a licensee shall provide, within a reasonable time, but not in excess of 45 days, an accounting statement to the borrower, setting forth:1) All payments made on the loan;.
09.03.06.15.htm 09.03.06.15. 15 Waivers.. A. An act, agreement, or statement of an applicant may not constitute a valid waiver of any benefit or protection provided to an applicant under these regulations or applicable law.B. Nothing in this regulation affects the validity of any waiver specifically permitted under the Commercial Law Article, Annotated Code of Maryland.
09.03.06.16.htm 09.03.06.16. 16 Bonds, Letters of Credit, and Trust Accounts.. A. The required amount of a bond, letter of credit, or trust account established to meet the requirements of Financial Institutions Article, §11-508, Annotated Code of Maryland, shall be subject to recalculation at the time a license is renewed.B. The Commissioner shall use information provided by the licensee as well as the licensee’s last four quarterly call reports filed with NMLS to recalculate the required amoun
09.03.06.17.htm 09.03.06.17. 17 Enforcement.. A person who violates these regulations is subject to the enforcement provisions of Financial Institutions Article, §11-517, Annotated Code of Maryland.
09.03.06.18.htm 09.03.06.18. 18 Continuing Education.. A. Purpose and Applicability.. 1) The State legislature has determined that it is in the public interest to require licensees to comply with a continuing education requirement as a prerequisite to the renewal of a mortgage lender license.2) The continuing education requirement does not apply to the original application for a license.. B. Definitions. In this regulation, the following terms have the meanings indicated:. 1) "Continuing education
09.03.06.19.htm 09.03.06.19. 19 Ability to Repay.. A. Purpose and Scope.. 1) The General Assembly has determined that it is in the public interest to require lenders to comply with special rules with respect to certain mortgage loans.2) This regulation applies to loans subject to Commercial Law Article, §12-127, 12-311, 12-409.1, and 12-1029, Annotated Code of Maryland.B. Subject to §C of this regulation, a lender shall give due regard to the borrower’s ability to repay the mortgage loan, as follows:
09.03.06.20.htm 09.03.06.20. 20 Duty of Care.. A. Good Faith and Fair Dealing. A licensee has a duty of good faith and fair dealing in communications, transactions, and course of dealings with a borrower in connection with the advertisement, solicitation, making, servicing, purchase, or sale of any mortgage loan, including, but not limited to:1) The duty to recommend to a borrower or induce a borrower to enter into only a mortgage loan refinancing that has a net tangible benefit to a borrow
09.03.06.21.htm 09.03.06.21. 21 Nontraditional and Higher-Priced Mortgage Loans.. A. In this regulation, the following terms have the meanings indicated:. 1) "Interest-only mortgage loan" means a mortgage loan on which, for a specified period of time, the borrower is required to:a) Pay only the interest due on the mortgage loan; and. b) After the interest-only period ends, make payments that include both principal and interest.. 2) "Nontraditional mortgage loan" means any mortgage loan that allows the b
09.03.06.22.htm 09.03.06.22. 22 Fees.. A. Application Investigation Fee. The nonrefundable investigation fee required by Financial Institutions Article, §11-507(b)1) Annotated Code of Maryland, is $1.B. Initial License Fee.. 1) The license fee required by Financial Institutions Article, §11-507(b)2) Annotated Code of Maryland, is $1,000 for a 1-year license term.2) In addition to the initial license fee set forth in §B(1) of this regulation, an applicant for a license shall pay to NMLS the license application
09.03.06.23.htm 09.03.06.23. 23 Supervision of Mortgage Loan Originators.. A. A licensee who is the employer of a mortgage loan originator shall at all times reasonably and adequately supervise those activities of the mortgage loan originator that are conducted within the scope of the mortgage loan originator’s employment.B. In order to determine whether supervision by the licensee is reasonable and adequate, the Commissioner may consider factors that include the following:1) The availability of:.
09.03.06.24.htm 09.03.06.24. 24 Data Protection.. A. A licensee that adequately demonstrates compliance with the federal Interagency Guidelines Establishing Information Security Standards, 12 CFR Part 30, Appendix B, as it may be amended from time to time, shall be deemed to be in compliance with §B―G of this regulation.B. A licensee shall develop, implement, and maintain a comprehensive information security program that is commensurate with the licensee’s size and complexity, the nature and
09.03.06.25.htm 09.03.06.25. 25 Significant Event Reporting.. A. A licensee shall comply with the duty to report set forth in COMAR 09.03.10.02.. B. A licensee shall notify the Commissioner in writing through NMLS, and, if applicable, amend the licensee’s information and disclosures in NMLS, within 2 business days of the occurrence of any of the following events:1) Insolvency, filing for bankruptcy or reorganization of the licensee, the placement into receivership by any court, or an assignment for the benefit
09.03.06.9999.htm 09.03.06.9999. Administrative History Effective date:. Regulations .01―15, Code of Conduct―Mortgage Lenders, adopted as an emergency provision effective July 1, 1989 (16:14 Md. R. 1564) emergency status extended at 16:26 Md. R. 2782 (Emergency provisions are temporary and not printed in COMAR) ―Regulations .01―16, Mortgage Lenders, adopted effective February 19, 1990 (17:3 Md. R. 297). Regulation .06A amended effective July 31, 1995 (22:15 Md. R. 1119).
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