On January 10, 2025, the Maryland Office of Financial Regulation (OFR) issued guidance significantly expanding licensing requirements for assignees of residential mortgage loans in Maryland. The guidance stems from an April 2024 court ruling and raises important considerations for entities involved in the secondary mortgage market. Maryland’s licensing laws did not explicitly require a license to purchase closed and funded residential mortgage loans. However, in April 2024, the Appellate Court of Maryland ruled that an assignee of a home equity line of credit was required to obtain a license to have the legal authority to bring a foreclosure action. The OFR’s new guidance expands upon this ruling, asserting that any assignee of residential mortgage loans, including “passive trusts,” must obtain a license under Maryland mortgage lending laws in order to acquire or obtain assignments of any mortgage loans. This applies regardless of lien position and whether the loans are open- or closed-end extensions of credit. The court highlighted that exempting assignees from these requirements would undermine consumer protection statutes designed to ensure that entities involved in mortgage lending possess the requisite oversight.
Maryland Mortgage Trusts Must Meet Strict Licensing Requirements to Operate Legally in the State.
Licensing Requirements for Mortgage Trusts in Maryland
The Maryland Office of the Financial Regulation (OFR) has established specific licensing requirements for mortgage trusts operating in the state. These requirements are designed to ensure that mortgage trusts comply with state regulations and maintain the integrity of the mortgage industry.
Key Licensing Requirements
- Having a minimum net worth of $1 million
- Having a minimum of $10 million in assets
- Having a minimum of $5 million in liabilities
- Having a minimum of 10 employees
- Having a minimum of 5 years of experience in the mortgage industry
Emergency Regulations
The OFR has issued emergency regulations to streamline the licensing process for mortgage trusts.
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