Does the state require a physical location within the state?
No, a lender is not required to maintain an office in Maryland, but only if the laws of the state where its principal office is located authorize a mortgage lender from Maryland to engage in mortgage lending without maintaining an office in that state. However a registered agent must be designated and maintained within the state at all times during the term of the license.

Is there individual loan officer licensing?
Yes. Individual mortgage loan originators must be licensed if they work for mortgage lenders who also act as brokers, or if they work from "net branches." Mortgage loan originators who work for licensed mortgage lenders are exempt from licensing if the employing lender neither acts as a mortgage broker (does not broker mortgage loans) nor operates "net branches."

What are lenders, brokers and loan officers called?
The Maryland Department of Labor, Licensing and Regulation (DLLR) regulates “mortgage brokers” and “mortgage lenders” under the Maryland Mortgage Lenders Law. Loan officers who are employed by these lender/brokers must be licensed as “loan originators”. Each branch location requires its own license.

What is the cost of a license? Surety bond? Are there net worth requirements?
The initial fee to obtain a mortgage lender license is $500 for applicants in odd-numbered year and $1,000 for applicants in even-numbered years. The investigation fee for all applicants is $100. Application processing is normally 60 days or less after the submission of a “complete” application (no missing or incomplete information).

A surety bond is required of all applicants.
For applicants who have not conducted mortgage lending business in Maryland or elsewhere during the past 36 months the initial bond amount is $15,000.

Upon license renewal, the bond amount varies depending on the applicant's mortgage lending activity as follows:
$25,000 if the aggregate amount of loans in the sworn activity statement is $3 million or less,
$50,000 if the aggregate amount of loans in the sworn activity statement is over $3 million but less than $5 million; and
$75,000 if the aggregate amount of loans in the sworn activity statement is $10 million or more.

The term of the mortgage lender license is two years. The renewal fee is currently set at $1,000.

An applicant for a mortgage originator license must submit a completed application, pay a nonrefundable investigation fee of $100 and a license fee of $300. Fingerprint cards (and the applicable fee) are also required.

Is there a pre-licensing education requirement? Is there a test?
Yes. To qualify for a mortgage originator license, an applicant must show that he or she has at least three years of experience in the mortgage lending business and has completed continuing-education courses required by section 09.03.06.17 of the Maryland Code of Regulations (20 hours). As an alternative an applicant may complete, in the two years immediately preceding the application, at least 40 hours of classroom education and pass a written exam.

Is there a CE requirement?
The Commissioner has issued regulations requiring that in order to renew his or her license a mortgage originator must have successfully completed, in the two years immediately preceding renewal, at least 20 hours of continuing education. The regulations impose specific requirements with respect to the topics to be covered by this continuing education.

A licensed lender's “covered employees” must also meet continuing education requirements of the Division of Financial Regulation, as set forth in the Code of Maryland Regulations (at least 20 hours).

“Covered employees” include those who accept loan applications or directly contact borrowers about loan terms, but do not include loan processors or employees of the lender who have been employed less than six months with no prior experience with a licensee.

The 20 hours of education must include:
2 hours of ethics,
2 hours of fair lending,
2 hours on the Real Estate Settlement Procedures Act,
2 hours of Truth-In-Lending,
2 hours of other federal law,
2 hours of Maryland law and
8 hours of electives.

Employees of licensees or entities exempt from licensing who have been employed for the immediately preceding 10 years are only required to complete 6 hours of continuing education, not 20.

Are there different requirements for mortgage brokers and mortgage lenders (i.e. can you broker under a lender license)?
The Maryland Department of Labor, Licensing and Regulation (DLLR) licenses mortgage brokers and mortgage lenders under the Maryland Mortgage Lenders Law. It s important to remember that if your company acts as a mortgage broker then the loan originators working for you must be licensed as loan originators.

Are there any state specific high cost loan provisions?
The portion of the Maryland Consumer Mortgage Protection Act covering the thresholds and prohibitions on what the state defines as “covered loans” became effective October 1, 2002. A covered loan is a loan that meets the criteria described for a loan subject to the federal Home Ownership Equity Protection Act (HOEPA), except that the threshold percentages for the mortgage loan shall be 1 percentage point less than those specified in and as modified by Regulation Z. There are numerous restrictions and prohibitions that apply to covered loans that are specified in the act.

Are there any state specific predatory lending laws?
See the high cost loan provisions.

Closing practices – attorney or title state? Wet or dry settlement?
Wet funding is required by statute in Maryland. Severe penalties may be assessed for noncompliance with the statutes.

Are there 2nd mortgage policies and/or restrictions? Do you need a separate license to do 2nd mortgages?
A mortgage lender is defined in Maryland Code as any person (other than a financial depository institution) who negotiates, makes, or services mortgage loans. A mortgage loan is defined as any loan or extension of credit that is secured by any interest, regardless of lien position, in residential owner-occupied real property situated in Maryland. Therefore, the Maryland mortgage lender license covers both first-and junior-lien mortgage loan origination.

Second mortgages on Maryland properties are governed by either the Credit Grantor Code or the Secondary Mortgage Loan Law. If the lender does not expressly indicate that it elects to operate under the Credit Grantor Code, then the default law that governs the lending activity is the Secondary Mortgage Loan Law. In general the Credit Grantor's Code is the preferred law. The lender must elect to make each loan pursuant to the Credit Grantor Code (if it chooses to do so) by referencing the Credit Grantor Code in each note.

Who is the regulator and what is their contact information?
Commissioner of Financial Regulation
500 N. Calvert Street, Room 402
Baltimore, MD 21202
Phone: (410) 230-6100
Fax: (410) 333-0554 or (410) 333-3866
www.dllr.state.md.us/finance/

DISCLAIMER: The data contained here is for informational purposes only. It should not be the sole resource for licensing decisions. Please consult the regulator and/or an attorney that specializes in these matters before taking action.


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