.08 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 the progress of the processing of a loan application in the event that problems arise in the processing or underwriting of a loan which may delay closing; and

(4) Shall comply with all State and federal laws and regulations applicable to a particular loan.

B. If a mortgage lender elects to make a loan under Commercial Law Article, Title 12, Subtitle 9 or Subtitle 10, Annotated Code of Maryland, the lender shall make that election in writing in the:

(1) Agreement, note, or other evidence of an extension of closed end credit; or

(2) Agreement governing a revolving credit plan.