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Copyright, 2009
Maryland Licensing Laws forMortgage Brokers
October 7, 2009
Marjorie A. Corwin
Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC
233 East Redwood Street
Baltimore, Maryland 21202
410-576-4041 [email protected]
Today’s Presentation
■ What education is now required by Maryland for both the Mortgage Lender (company) license and the Mortgage Loan Originator (individual) license?
■ What Maryland laws and regulations apply to MLOs and their employers?
■ What will be covered on the new MLO continuing education test?
■ What are “hot” Maryland compliance issues?
Maryland Licensing Law
• Effective July 1, 2009, Maryland licensing law changed to comply with the federal Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act)
Chapter 4 of the 2009 Laws of Maryland (introduced as Senate Bill 269)
Found at http://mlis.state.md.us/2009rs/billfile/sb0269.htm
Maryland Licensing Law
• Requires mortgage lenders, brokers, and servicers to be licensed (“company level” licensing)
and
• Requires mortgage loan originators to be licensed (“individual level” licensing)
Minimum Requirements for Company License
Commissioner may not issue ML (company) license unless she finds:
1) Sufficient financial responsibility, experience, and fitness to warrant belief that business will be conducted lawfully, fairly, and efficiently
2) 3 years of experience in mortgage lending business
3) No felony conviction involving fraud, theft, or forgery within last 10 years
4) Net worth requirements5) Surety bond requirements
Continuing Education for Company Renewal License
Education is required
in order to renew a Mortgage Lender
(company level) license.
Minimum Requirements forMLO License
Commissioner may not issue MLO (individual) license unless she finds:
1) No MLO license previously revoked
2) No felony within past 7 years (or any time as to certain felonies)
3) Demonstrates financial responsibility, character, and fitness
4) Pre-licensing education
5) Pass a test
6) Surety bond requirements
Pre-licensing Education Requirements
4) Pre-licensing MLO Education
20 hours After 1/1/10, it is believed that all courses and
course providers must be approved by NMLS Offered in classroom or online or by any other
means approved by NMLS Successful completion of non-State specific
courses in another State will be accepted by Commissioner
Keep records for 3 years
Pre-licensing Testing Requirements
5) Pre-licensing MLO Testing
Developed by NMLS Must pass by at least 75% correct May retake the test only after waiting at least
30 days After failing test 3 times, must wait at least 6
months before retaking test
Maryland Laws
Financial Institutions Article (Fin. Inst.)
Commercial Law Article (Com. Law)
Real Property Article (Real Prop.)
Code of Maryland Regulations (COMAR)
Maryland Laws
Financial Institutions Article (Fin. Inst.)
Contains licensing laws for both company level (Fin. Inst. §11-501 et seq.) and individual level (Fin. Inst. §11-601 et seq.)
Establishes the authority of the Commissioner (Fin. Inst. §2-101 et seq.)
Maryland Laws
Commercial Law Article (Com. Law)
Contains finders/broker fee law (Com. Law §12-801 et seq.)
Contains “credit laws” which control loan terms (Com. Law §§12-101 et seq., 12-401 et seq., 12-901 et seq., and 12-1001 et seq.)
Contains consumer protection laws (Com. Law §§12-701 et seq. and 13-301 et seq.)
Maryland Laws
Real Property Article (Real Prop.)
Contains laws that impact mortgages and deeds of trust (Real Prop. §§3-101 et seq., 4-101 et seq., 7-101 et seq., and 7-301 et seq.)
Maryland Regulations
Code of Maryland Regulations (COMAR)
http://www.dsd.state.md.us/comar/comar.aspx
Maryland Regulations
Subtitle 03 COMMISSIONER OF FINANCIAL REGULATION
09.03.01 Credit Unions09.03.02 General Regulations09.03.03 Procedure for Handling Applications09.03.04 Retail Installment Sellers09.03.05 Code of Conduct—Mortgage Brokers and Mortgage Bankers - Repealed09.03.06 Mortgage Lenders09.03.07 Credit Reporting Agencies09.03.08 Debt Management Services - Repealed09.03.09 Mortgage Originators 09.03.10 Credit and Other Regulation 09.03.11 Recordation of Security Instruments for Residential Property09.03.12 Foreclosure Procedures for Residential Property
Maryland Regulations
Subtitle 03 COMMISSIONER OF FINANCIAL REGULATION
09.03.06 Mortgage Lenders
09.03.09 Mortgage Originators
09.03.10 Credit and Other Regulation
09.03.11
Recordation of Security Instruments for Residential Property
09.03.12
Foreclosure Procedures for Residential Property
SAFE Act Test: Maryland
SAFE Mortgage Loan Originator Test – State Component
Maryland Content Outline
(45 scored test questions; 10 unscored test questions)
SAFE Act Test: Maryland
I. DLLR, Division of Financial Regulation (5%) II. State Law and Regulation Definitions (10%) III. License Law and Regulation (25%) IV. Compliance (50%) V. Disciplinary Action (10%)
SAFE Act Test: Maryland
I. DLLR, Division of Financial Regulation (5%)
A. Regulatory authority (See Fin. Inst. §2-101 et seq. and §11-601 et seq.)
B. Department/agency structure (Same)
C. Responsibilities and limitations (Same)
SAFE Act Test: Maryland
II. State Law and Regulation Definitions (10%)
A. Financial Institutions Article (See Fin. Inst. §11-601; see also Fin. Inst. §11-501 )
B. Commercial Law Article (See Com. Law §12-801, §12-101, §12-901, §12-1001, §13-301)
C. Other State Law and Regulations (See COMAR 09.03.09 and 09.03.06; Real Prop. Titles 3 and 7)
SAFE Act Test: Maryland
III. License Law and Regulation (25%)
A. Persons required to be licensed
B. Licensee qualifications and application process
C. Grounds for denying a license
D. License maintenance
SAFE Act Test: Maryland
IV. Compliance (50%)
A. Prohibited conduct and practices
B. Required conduct
C. Fees and charges
D. Disclosures and agreements
E. Advertising
SAFE Act Test: Maryland
V. Disciplinary Action (10%)
A. Notifications, hearings, and appeals
B. Suspension, revocation, and rescission of licenses
C. Penalties and fines
D. Civil and criminal liability
Maryland Hot Topics
Most Common Broker Violations
No broker agreement.
Broker agreement was not provided within 10 business days.
Broker agreement not signed and/or dated.
Most Common Broker Violations
Exact broker fee not specified.
Overcharge on broker fees.
Broker charged fees not included in broker agreement.
Most Common Broker Violations
Broker fee on refinance loan on same property within 24 months.
More than one broker agreement issued.
Maryland Financing Agreement not properly provided.
Questions
Copyright, 2009
Thank you!
Marjorie A. Corwin
Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC233 East Redwood StreetBaltimore, Maryland 21202
