Maryland Origination Reference Guide
- Kacey Olson
Owned by Kacey Olson
| Citation | Topic | Requirement |
| Credit Grantors / Md. Code Ann. Comm. Law §12-1013.2 | Acknowledgement of Delivery - Closed-End Credit | With respect to extensions of closed-end credit, credit grantors must deliver a copy of the agreement, note, or other evidence of the loan to the borrower no later than the time of consummation of the loan. If consummation of the loan does not occur in a face-to-face transaction between the credit grantor and the borrower, the credit grantor may delay delivering a copy of the agreement, note, or other evidence of the loan to the borrower until the due date of the first payment. If there is more than 1 borrower, a copy of the agreement, note, or other evidence of the loan may be delivered to any borrower who is primarily liable on the loan. Written acknowledgment by a borrower of delivery of a copy of the agreement, note, or other evidence of the loan is conclusive proof of the delivery as between the borrower and any assignee of the agreement, note, or other evidence of the loan without actual knowledge to the contrary. |
| Credit Grantors / Md. Code Ann. Comm. Law §12-913.2 | Acknowledgement of Delivery - Revolving Credit Plan | A credit grantor must deliver a copy of the agreement governing a revolving credit plan to the borrower no later than 30 days after the credit grantor establishes the account governed by the agreement for the borrower's use. If there is more than 1 borrower, a copy of the agreement governing the plan may be delivered to any borrower who is primarily liable on the account. Written acknowledgment by a borrower of delivery in accordance with this requirement is conclusive proof of delivery as between the borrower and any assignee of the account established under the plan without actual knowledge to the contrary. |
| Mortgage Lender Law / Md. Regs. Code tit. 09, §03.06.07(A) | Agreements in Writing and Copies of Documents | All agreements between a borrower and a licensee must be in writing; and provided to the borrower following execution by all parties. Exact copies of original documents may be provided to the borrower to satisfy this requirement. |
| Mortgage Lender Law / Md. Regs. Code tit. 09, §03.06.07(B) | Blank Spaces | A mortgage lender may not obtain a borrower's signature on any of the following documents if blanks remain to be filled in after execution by the borrower: (1) a note, deed of trust, or mortgage; (2) an affidavit by the borrower; (3) any written certification or statement by the borrower as to use of loan proceeds; (4) any other instrument granting security interest in property; (5) any other document which constitutes a debt obligation of the borrower; (6) a finder's fee agreement required under Commercial Law Article, §12-805, Annotated Code of Maryland. |
| Credit Regulations / Md. Code Ann. Comm. Law §12-1303 | Borrower Counseling Notice | Unless the lender is otherwise required by federal or state law to refer the borrower to Housing Counseling, a lender must provide to a borrower a written notice, in the form specified in regulations adopted by the Department of Housing and Community Development, in consultation with the Commissioner of Financial Regulation that includes: (1) a statement recommending that the borrower complete Home Buyer Education or Housing Counseling; and, (2) information about Home Buyer Education and Housing Counseling programs and services provided by nonprofit and government organizations certified by the U.S. Department of HUD that are available to residents of Maryland. |
| Mortgage Lender Law / Md. Code Ann. Comm. Law §12-805(d) | Broker's Finder's Fee Agreement | A finder's fee may not be charged unless it is pursuant to a written agreement between the mortgage broker and the borrower which is separate and distinct from any other document. The terms of the proposed agreement must: (1) be disclosed to the borrower before the mortgage broker undertakes to assist the borrower in obtaining a loan or advance of money; (2) specify the amount of the finder's fee; and (3) contain a representation by the mortgage broker that the mortgage broker is acting as a mortgage broker and not as a lender in the transaction. A copy of the agreement, dated and signed by the mortgage broker and the borrower, must be provided to the borrower within 10 business days after the date the loan application is completed. |
Closed-End Credit and Revolving Credit Plan | An agreement governing an extension of credit by a credit grantor to a borrower for personal, household, or family purposes, may not contain: (1) an assignment or order for the payment of wages, whether earned or to be earned, or of any chose in action covering lost wages; (2) an acceleration clause under which any part or all of the unpaid balance of any extension of credit not yet matured may be declared due and payable because the credit grantor deems itself insecure; (3) a confession of judgment or any power of attorney authorizing the credit grantor to appear in court to confess judgment against the borrower or a surety or guarantor of the borrower, or any other waiver of the right to notice and an opportunity to be heard in the event of suit or process thereon; or (4) a provision by which a person acting on behalf of a holder of the agreement is treated as an agent of the borrower in connection with its formation or execution. An agreement also may not require the borrower to waive any right accruing to the borrower under the Maryland credit grantor laws. Any clause or provision in an agreement which evidences or secures an extension of credit by a credit grantor that is in violation of the credit grantor laws will be unenforceable. | |
| Mortgage Lender Law / Md. Regs. Code tit. 09, §03.06.09(B) | Collection of Fees | A mortgage lender licensee may not collect any fee from the applicant before providing the financing agreement, except that a licensee may collect fees which are to be fully paid to third parties for services in connection with the loan, before providing a financing agreement. |
Mortgage Lender Law & Credit Grantors / Md. Code Ann. Comm. Law §12-125(c) | Commitment Waiver Letter | After execution of the financing agreement, the borrower may waive, in writing, the 72-hour advance presentation requirement and accept the commitment at settlement only if compliance with the 72-hour requirement is shown by the lender to be infeasible. |
| Md. Code Ann., Comm. Law § 12-1013.2.  | Delivery - Closed-End Credit | For loans made under the Credit Grantor Provisions, the lender must deliver a copy of the agreement, note, or other evidence of the loan to the borrower no later than the time of consummation of the loan. If the consummation of the loan does not occur in a face-to-face transaction between the credit grantor and the borrower, the credit grantor may delay delivering a copy of the agreement, note, or other evidence of the loan to the borrower until the due date of the first payment. If there is more than one borrower, a copy of the agreement, note, or other evidence of the loan may be delivered to any borrower who is primarily liable on the loan. Written acknowledgement by a borrower or delivery made in accordance with this section of a copy of the agreement, note, or other evidence of the loan is conclusive proof of the delivery as between the borrower and any assignee of the agreement, note, or other evidence of the loan without actual knowledge to the contrary. |
| Md. Code Ann., Comm. Law § 12-1013.2.  | Delivery - Revolving Credit Plan | For loans made under the Credit Grantor Provisions, the lender must deliver a copy of the agreement, note, or other evidence of the loan to the borrower no later than the time of consummation of the loan. If the consummation of the loan does not occur in a face-to-face transaction between the credit grantor and the borrower, the credit grantor may delay delivering a copy of the agreement, note, or other evidence of the loan to the borrower until the due date of the first payment. If there is more than one borrower, a copy of the agreement, note, or other evidence of the loan may be delivered to any borrower who is primarily liable on the loan. Written acknowledgement by a borrower or delivery made in accordance with this section of a copy of the agreement, note, or other evidence of the loan is conclusive proof of the delivery as between the borrower and any assignee of the agreement, note, or other evidence of the loan without actual knowledge to the contrary. |
| Real Property Laws / Md. Code Ann., Real Prop. §4-106(b) | Delivery of Net Proceeds Authorization (Wet Settlement Authorization) | A lender may deliver net proceeds, deducting charges, interests, expenses, or advance escrow and charges due from the borrower if: (1) the charges, interests, expenses, and other deductions listed above are agreed upon in advance, in writing; and (2) the lender provides a schedule of the deductions along with the net proceeds delivered. |
| Credit Regulations / Md. Regs. Code tit. 09, §03.10.03 | Disclosure of Certain Mortgage Loan Provisions | A regulated person subject to the authority of the Commissioner of Financial Regulation that offers to make or procure a mortgage loan secured by residential real property must provide to the borrower the disclosures set forth below if the terms of the mortgage loan: (1) include a balloon payment; (2) do not provide for the establishment of an escrow account for the payment of taxes and insurance; or (3) include mandatory binding arbitration. |
| Mortgage Lender Law / Md. Regs. Code tit. 09, §03.06.09(C) | Disclosure of Fees to be Paid by Seller | A mortgage lender licensee may condition the making of a loan on the real estate seller's paying certain fees only if the seller has agreed in writing to pay those fees; or at the time the borrower elects the type of loan applied for, the licensee discloses in writing: (1) fees which the seller may be required to pay; (2) the fact that the borrower has the responsibility for informing the seller about the fees; and (3) the fact that the loan will not be made unless the seller, or someone other than the borrower, pays those fees. |
| Mortgage Lender Law / Md. Regs. Code tit. 09, §03.06.11 | Exclusive Agency Agreement | A person acting as a mortgage broker in a loan transaction may not obtain an exclusive dealing or exclusive agency agreement from any borrower. However, 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 the broker. |
| Mortgage Lender Law / Md. Regs. Code tit. 09, §03.06.11(C) | Fees Collected by Broker | Except for a fee to be paid to a third party for services in connection with the loan, a person acting as a broker in a loan transaction may not collect a fee from an applicant before the loan is closed. |
Md. Code Ann., Real Prop. §3-104.1 | License Information/Affidavit | Security instruments recorded are required to include the name and licensee number of the mortgage lender and mortgage originator, or an affidavit in lieu thereof. |
| Mortgage Lender Law / Md. Regs. Code tit. 09, §03.06.08(B) | Loans Made Under the Credit Grantor Provisions | If a mortgage lender elects to make a loan under Commercial Law Article, Title 12, Subtitle 9 or Subtitle 10, Annotated Code of Maryland (credit grantor provisions), the lender must make that election in writing in the agreement, note, or other evidence of an extension of closed end credit, or agreement governing a revolving credit plan.. |
| Mortgage Lenders / Md. Regs. Code tit. 9, §03.06.20(A) | Net Tangible Benefit Worksheet | 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. This includes 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 the borrower, considering all of the circumstances, including the terms of a loan, the cost of a loan, and the borrower's circumstances. |
| Real Property Laws / Md. Code Ann. Real Prop. §10-702 | Notice of Right to Rescind | A purchaser's right to rescind the contract of sale under this subsection terminates if not exercised: (i) before making a written application to a lender for a mortgage loan, if the lender discloses in writing at or before the time application is made that the right to rescind terminates on submission of the application; or (ii) within 5 days following receipt of a written disclosure from a lender who has received the purchaser's application for a mortgage loan, if the lender's disclosure states that the purchaser's right to rescind terminates at the end of that 5-day period. |
| Mortgage Lender Law / Md. Regs. Code tit. 09, §03.06.10(c) | Original Document and Copy of Appraisal | If a loan transaction is not closed, a mortgage lender licensee must, upon written request by the applicant, return to the applicant: (1) all original documents and other materials which were supplied to the licensee by the borrower; and (2) if paid for by the borrower, a copy of the appraisal report. This requirement does not apply to any portion of an appraisal report which any federal law or regulation prohibits the licensee from releasing to the applicant. The licensee may retain copies of all documents returned to the borrower. The original written application for a loan need not be returned to the borrower. |
| Secondary Mortgage Loan Law / Md. Code Ann. Comm. Law §12-408 | Refinancing Restrictions (2nd lien) | A lender may not refinance a secondary mortgage loan more often than once during any 12-month period of the loan, and twice during any 5-year period of the loan. |
| Mortgage Lender Law / Md. Regs. Code tit. 09, §03.06.09(A) | Retain Fee | A mortgage lender 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. |
| Credit Regulations / Md. Code Ann. Comm. Law §12-1207 | Reverse Mortgage Loan Written Checklist | On receiving an application for a reverse mortgage loan, a lender or an arranger of financing must provide a prospective borrower with a written checklist, written in 12-point font type or larger, advising the borrower to discuss the following issues with a counseling agency counselor: (1) how unexpected medical or other events that cause the borrower to move out of the borrower's home earlier than anticipated will impact the total annual costs of the reverse mortgage loan; (2) the extent to which the borrower's financial needs would be better met by options other than a reverse mortgage loan, including less costly home equity lines of credit, property tax deferral programs, or governmental aid programs; (3) whether the borrower intends to use the proceeds of the reverse mortgage loan to purchase an annuity or other financial or insurance product and the consequences of doing so; (4) the effect of repayment of the reverse mortgage loan on other residents of the home securing the reverse mortgage loan after all borrowers have died or permanently left the home; (5) the borrower's ability to finance routine or catastrophic home repairs, especially if maintenance is a factor that may determine when the reverse mortgage loan becomes payable; (6) the impact that the reverse mortgage loan may have on the borrower's tax obligations and eligibility for government assistance programs, and the effect that losing equity in the home securing the reverse mortgage loan will have on the borrower's estate and heirs; and, (7) the ability of the borrower to finance alternative living accommodations, such as assisted living or long-term care, after the borrower's equity is depleted. |
| Credit Regulations / Md. Code Ann. Comm. Law §12-119 | Right to Choose Attorney or Title Insurance Company | For loans secured by a first mortgage or first deed of trust on a borrower's primary residence, if any lender imposes fees on the borrower for settlement services, or document review services, performed by a lender-designated attorney, or if the lender conditions settlement on the employment of a particular attorney or title insurance company, the lender must provide a prospective borrower with a written notice stating: (1) the lender's requirements concerning selection of an attorney, title insurance company, or other person to perform settlement services relating to the purchase of the real property; (2) the borrower's ability to choose an attorney or title insurance company under Maryland law; and (3) a good faith estimate of the fee or fees to be charged to the borrower. This notice must be provided at the time of or within 3 days after the application for a loan, or earlier upon request, and a copy of the notice, signed by the applicant, must accompany any executed application for a loan. |
| Secondary Mortgage Loan Law / Md. Code Ann. Comm. Law §12-409 | Secondary Mortgage Loan Instruments | An instrument which evidences or secures a secondary mortgage loan may not contain any of the following: (1) an acceleration clause under which any part or all of the unpaid balance of the loan not yet matured may be declared due and payable for any reason other than default by the debtor in the payment or in another required term of the instrument; (2) any provision by which the debtor waives any right accruing to him under the provisions of Maryland law regarding secondary mortgage loans; or (3) any assignment or order for the payment of wages, whether earned or to be earned. |
| Credit Regulations / Md. Code Ann. Comm. Law §12-120(b) | Statement of Attorney's Fee | A lender may require the borrower to pay for services rendered by the lender's attorney in connection with a loan only if: (1) the attorney's fee is limited to legal services attributable to processing and closing the loan and not to unrelated services performed by the attorney for the lender; (2) the amount of the attorney's fee, if in excess of $100, is supported by a statement, provided to the borrower at or prior to settlement, that: (i) describes the services performed; (ii) sets forth the time spent by the attorney and the hourly rate or other basis for determining the fee; (iii) states that the legal services are being performed on behalf of the lender and not on behalf of the borrower; and (iv) states that the services are being paid for by the borrower; (3) the amount of the attorney's fee is reasonable on the basis of the legal services performed; and (4) the attorney's fee is separately itemized on the loan settlement sheet and identified as a fee to the lender's attorney. |
| Credit Regulations / Md. Code Ann. Comm. Law §12-106(b) | Truth in Lending Statement (Loans excempt from TILA) | Before the execution of a loan contract a lender must furnish to the borrower a written statement which sets forth: (1) the total principal amount of the loan and the total amount of finance charge as defined in the federal Truth in Lending Act to be paid, stated in dollars, except that on loans payable on demand, the total amount of finance charge to be paid must be stated on a per diem basis; (2) the annual effective rate of simple interest charged, stated in percentage calculated to the nearest 0.2 %; and (3) the itemized amount of payments in addition to interest payable to the lender in connection with the loan at the time the loan is made, stated in dollars. If the loan is made to 2 or more borrowers, delivery of the statement to 1 borrower is sufficient, but a copy of the statement must be furnished to each other borrower. The above disclosure requirement does not apply to any loan subject to the disclosure provisions of the federal Truth in Lending Act, if the lender complies with the applicable disclosure provisions of the federal act and its regulations. |