At A Glance
In response to market concerns regarding licensing guidance for assignees of certain residential mortgage loans and installment loans released by the Maryland Office of Financial Regulation in January, that agency made important announcements this week. The OFR has worked with the industry to propose new legislation that would provide exemptions from licensing and updated its previous guidance to extend the enforcement deadline to give impacted entities more time to comply, depending on the outcome of the legislative efforts.
This week saw two positive developments in connection with the recently announced licensing requirements for assignees of residential mortgage loans and installment loans in Maryland. This Legal Update discusses both developments.
BACKGROUND
Guidance Is Issued
As we discussed in our Legal Update last month, the Maryland Office of Financial Regulation (OFR) started the year off by issuing formal guidance asserting that assignees of residential mortgage loans'including certain "passive trusts" that acquire or obtain assignments of residential mortgage loans in Maryland'must become licensed in Maryland prior to April 10, 2025, unless the assignee is expressly exempt under Maryland law. The guidance reflected the OFR's understanding of an April 2024 decision by the Appellate Court of Maryland in Estate of Brown v. Ward, 261 Md. App. 385 (2024) that any assignee of any residential mortgage loan is required to obtain a Mortgage Lender license and an Installment Loan license is required if the mortgage loans are made subject to the Credit Grantor provisions, regardless of whether the loans are open- or closed-end extensions of credit.
Installment loans include secured or unsecured loans that are made subject to the Maryland Credit Grantor provisions (which authorize a lender that does not have...
