Maryland Mortgage Lender Law
The Annotated Code of the Public General Laws of Maryland
Article - Financial Institutions
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Table of Contents
§ 11-501. "Meanings"
§ 11-502. Affiliates
§ 11-503. Commissioner
§ 11-504. Licensee
§ 11-505. Place of Business
§ 11-506. Character
§ 11-506.1. Exempt Corporations;
§ 11-507. Application
§ 11-508. Renewal
§ 11-509. Investigation
§ 11-510. Requirements
§ 11-511. Expiration
§ 11-511.1. Continuing Education
§ 11-512. Change Place
§ 11-513. Keep Records
§ 11-514. License Surrender
§ 11-515. Examine Business
§ 11-516. Violations
§ 11-517. Suspension - Revocation
§ 11-518. Appeal Hearing
§ 11-519. Reinstatement
§ 11-520. Misrepresentations
§ 11-521. Commercial Purpose
§ 11-522. "Approved Servicer"
§ 11-523. Willful Violations
§ 11-524. "Maryland Mortgage Lender Law"
(a) In this subtitle the following words have the meanings indicated.
(b) "Borrower" means a person who makes a loan application for or receives a loan or other extension of credit that is or is intended to be secured in whole or in part by any interest in residential real property located in Maryland.
(c) "Federally approved seller-servicer" means a mortgage lender that has been approved as a seller-servicer by:
(1) The Federal Home Loan Mortgage Corporation;
(2) The Federal National Mortgage Association;
(3) The Government National Mortgage Association;
(4) The United States Department of Housing and Urban Development; or
(5) The United States Department of Veterans Affairs.
(d) (1) "Independent evidence of commercial purpose" means, where a mortgage loan is made for a commercial purpose to an individual, any and all documentation by which the mortgage lender, prior to the making or procurement of the loan, establishes that the borrower is seeking funds for a legitimate commercial enterprise.
(2) "Independent evidence of commercial purpose" does not include an affidavit of the borrower without supporting evidence, except where:
(i) The borrower is seeking funds to start a business and has not yet incorporated or prepared documentation or proof of ownership of a commercial enterprise; and
(ii) The affidavit states the purpose for which the proceeds of the mortgage loan are to be used and the nature of the business conducted or to be conducted by the borrower.
(e) "Interest in real property" includes:
(1) A confessed judgment note or consent judgment required or obtained by any person acting as a mortgage lender for the purpose of acquiring a lien on residential real property;
(2) A sale and leaseback required or obtained by any person acting as a mortgage lender for the purpose of creating a lien on residential real property;
(3) A mortgage, deed of trust or lien other than a judgment lien, on residential real property; and
(4) Any other security interest that has the effect of creating a lien on residential real property in Maryland.
(f) "License" means a license issued by the Commissioner under this subtitle to authorize a person to engage in business as a mortgage lender.
(g) "Licensee" means a person who is licensed under the Maryland Mortgage Lender Law.
(h) (1) "Loan application" means any oral or written request for an extension of credit that is made in accordance with procedures established by a mortgage lender for the purpose of inducing the lender to seek to procure or make a mortgage loan.
(2) A loan application does not include the use of an account or line of credit to obtain a loan within a previously established credit limit.
(i) "Mortgage broker" means a person who:
(1) For a fee or other valuable consideration, whether received directly or indirectly, aids or assists a borrower in obtaining a mortgage loan; and
(2) Is not named as a lender in the agreement, note, deed of trust, or other evidence of the indebtedness.
(j) (1) "Mortgage lender" means any person who:
(i) Is a mortgage broker;
(ii) Makes a mortgage loan to any person; or
(iii) 1. Engages in whole or in part in the business of servicing mortgage loans for others; or
2. Collects or otherwise receives payments on mortgage loans directly from borrowers for distribution to any other person.
(2) "Mortgage lender" does not include:
(i) A financial institution that accepts deposits and is regulated under Title 3, Title 4, Title 5, or Title 6 of this article;
(ii) The Federal Home Loan Mortgage Corporation;
(iii) The Federal National Mortgage Association;
(iv) The Government National Mortgage Association; or
(v) Any person engaged exclusively in the acquisition of all or any portion of a mortgage loan under any federal, State, or local governmental program of mortgage loan purchases.
(k) (1) "Mortgage lending business" means the activities set forth in the definition of "mortgage lender" in subsection (j) of this section which require that person to be licensed under this subtitle.
(2) "Mortgage lending business" includes the making or procuring of mortgage loans secured by residential real property located outside Maryland.
(l) (1) "Mortgage loan" means any loan or other extension of credit that is:
(i) Secured, in whole or in part, by any interest in residential real property in Maryland; and
(ii) 1. If for personal, household, or family purposes, in any amount; or
2. If for commercial purposes, not in excess of $75,000.
(2) "Mortgage loan" does not include any loan for commercial purposes that is:
(i) Secured, in whole or in part, by any interest in residential real property in Maryland;
(ii) In excess of $75,000; and
(iii) Supported by independent evidence of the commercial purpose.
(m) "Person" includes an individual, corporation, business trust, estate, trust, partnership, association, 2 or more persons having a joint or common interest, or any other legal or commercial entity.
(n) "Residential real property" means any owner-occupied real property located in Maryland, which property has a dwelling on it designed principally as a residence with accommodations for not more than 4 families, but does not include any real property held primarily for rental, investment, or the generation of income through any commercial or industrial enterprise.
(o) "State" means the State of Maryland.
(a) In this section, "affiliate" means any company that controls, is controlled by, or is under common control with an institution described in subsection (c) of this section.
(b) The provisions of this subtitle do not apply to:
(1) Any bank, trust company, savings bank, savings and loan association, or credit union incorporated or chartered under the laws of this State or the United States or any other-state bank having a branch in this State;
(2) Any insurance company authorized to do business in the State;
(3) Any corporate instrumentality of the Government of the United States including:
(i) The Federal Home Loan Mortgage Corporation;
(ii) The Federal National Mortgage Association; and
(iii) The Government National Mortgage Association;
(4) Any person who:
(i) Makes 3 or fewer mortgage loans per calendar year; and
(ii) Brokers no more than one mortgage loan per calendar year;
(5) Any person who takes back a deferred purchase money mortgage in connection with the sale of:
(i) Residential real property owned by, and titled in the name of, that person; or
(ii) A new residential dwelling that the person built;
(6) A nonprofit charitable organization registered with the Maryland Secretary of State or a nonprofit religious organization;
(7) An employer making a mortgage loan to an employee;
(8) A person making a mortgage loan to a borrower who is the person's spouse, child, child's spouse, parent, sibling, grandparent, grandchild, or grandchild's spouse;
(9) A real estate broker who:
(i) Is licensed in the State; and
(ii) Makes a mortgage loan providing a repayment schedule of 2 years or less to assist the borrower in the purchase or sale of a residential real property through the broker;
(10) A home improvement contractor licensed under the Maryland Home Improvement Law who assigns a mortgage loan without recourse within 30 days after completion of the contract to a person licensed under this subtitle or to an institution that is exempt from this subtitle under paragraphs (1), (2), or (11) of this subsection;
(11) A subsidiary or affiliate of an institution described in subsection (c) of this section, which subsidiary or affiliate:
(i) Is subject to audit or examination by a regulatory body or agency of this State, the United States, or the state where the subsidiary or affiliate maintains its principal office; and
(ii) Files with the Commissioner, prior to making mortgage loans, information sufficient to identify:
1. The correct corporate name of the subsidiary or affiliate;
2. An address and telephone number of a contact person for the subsidiary or affiliate;
3. A resident agent; and
4. Any additional information considered necessary by the Commissioner for protection of the public;
(12) Any employee benefit plan qualified under Internal Revenue Code § 401 or persons acting as fiduciaries with respect to such a plan, making mortgage loans solely to plan participants from plan assets; or
(13) Employees acting within the scope of their employment with:
(i) A licensed mortgage lender; or
(ii) A person who is exempt from licensure under this subtitle.
(c) The exemption in subsection (b)(11) of this section applies to subsidiaries and affiliates of:
(1) Any bank, trust company, savings bank, savings and loan association, or credit union incorporated or chartered under the laws of this State or the United States that maintains its principal office in this State;
(2) Any out-of-state bank, as that term is defined in § 5-1001 of this article, having a branch that accepts deposits in this State; or
(3) Any institution incorporated under federal law as a savings association or savings bank that does not maintain its principal office in this State but has a branch that accepts deposits in this State.
(d) The exemptions provided in subsection (b) of this section do not apply to any person who has been denied a license to engage in business as a mortgage lender or real estate broker or whose license to engage in such activities has been suspended or revoked within the 3 immediately preceding calendar years.
The Commissioner may adopt rules and regulations to carry out the provisions of this subtitle.
A person may not act as a mortgage lender unless the person is:
(1) A licensee;
(2) A person exempted from licensing under this subtitle; or
(3) A person registered under § 11-522 of this subtitle
(a) A license issued under this subtitle authorizes the licensee to act as a mortgage lender under the license at the licensed place of business.
(b) Only 1 place of business may be maintained under any 1 license.
(c) A mortgage lender may maintain more than 1 license under this subtitle provided that a separate application for each license is made pursuant to § 11-507 of this subtitle and the Commissioner approves such application.
(d) (1) The Commissioner shall include on each license:
(i) The name of the licensee; and
(ii) The address at which the business is to be conducted.
(2) A person may not conduct any mortgage loan business at any location or under any name different from the address and name that appears on the person's license.
(e) (1) A licensee may not allow any note, or loan contract, mortgage, or evidence of indebtedness secured by a secondary mortgage or deed of trust to be signed or executed at any place for which the person does not have a license, except at the office of:
(i) The attorney for the borrower or for the licensee; or
(ii) A title insurance company, a title company, or an attorney for a title insurance company or a title company.
(2) Notwithstanding paragraph (1) of this subsection, a licensee may conduct the loan closing at another location at the written request of the borrower or the borrower's designee to accommodate the borrower because of the borrower's sickness.
(3) The Commissioner shall adopt regulations to ensure that the loan application process is conducted fairly and in a manner consistent with the best interests of both the borrower and mortgage lender.
(f) A license may be issued under this subtitle to a business entity whose principal office is located outside this State provided that the business entity maintains a resident agent within the State at all times during the term of the license, regardless of whether:
(1) The business entity maintains any office within the State; or
(2) The activities of the business entity constitute doing business or having a tax situs in this State under the applicable provisions of the Corporations and Associations Article.
(a) To qualify for a license, an applicant shall satisfy the Commissioner that the applicant is of good moral character and has sufficient financial responsibility, business experience, and general fitness to:
(1) Engage in business as a mortgage lender;
(2) Warrant the belief that the business will be conducted lawfully, honestly, fairly, and efficiently; and
(3) Command the confidence of the public.
(b) (1) To qualify for a license, the applicant shall satisfy the Commissioner that the applicant has at least 3 years of experience in the mortgage lending business.
(2) If the applicant is a sole proprietor, the applicant shall have the required experience.
(3) If the applicant is a joint venture, or general or limited partnership, at least one of the coventurers or general partners shall have the required experience.
(4) If the applicant is a business entity of any other kind, type, or classification, at least one of the principal officers or members shall have the required experience.
(c) The Commissioner may deny an application for a license to any person who has been officially reprimanded or has committed any act that would be a ground for suspension or revocation of a license under this subtitle.
(a) This section shall not apply to any corporation the securities of which are exempt from registration under § 11-601(8) or (12) of the Corporations and Associations Article.
(b) In connection with an initial application and at any other time the Commissioner requests, each applicant or licensee shall provide fingerprints for use by the Federal Bureau of Investigation and the Criminal Justice Information System Central Repository of the Department of Public Safety and Correctional Services to conduct criminal history records checks.
(c) Any applicant or licensee required by this section to provide fingerprints, shall pay any processing or other fee required by the Federal Bureau of Investigation or the Criminal Justice Information System Central Repository of the Department of Public Safety and Correctional Services.
(d) If the applicant or licensee is a corporation, the fingerprinting and criminal history records check requirements shall apply to the president and to any other officer, director, or principal of the corporation as requested by the Commissioner.
(a) (1) To apply for a license, an applicant shall complete, sign, and submit to the Commissioner an application made under oath on the form that the Commissioner requires.
(2) The applicant shall comply with all conditions and provisions of the application for licensure and be issued a license before acting as a mortgage lender at a particular location.
(3) The application shall include:
(i) If the applicant is an individual, the applicant's name, business address and telephone number, and residence address and telephone number;
(ii) If the applicant is a partnership or other noncorporate business association, the business name, business address and telephone number, and the residence address and telephone number of each:
1. General partner, if the applicant is a limited partnership;
2. General partner who holds an interest in the partnership of more than 10 percent, if the applicant is a general partnership; or
3. Member, if the applicant is another noncorporate business association;
(iii) If the applicant is a corporation:
1. The name, address, and telephone number of the corporate entity; and
2. The name, the business telephone number, and the residence address and telephone number of the president, senior vice presidents, secretary, and treasurer, each director, and each stockholder owning or controlling 10 percent or more of any class of stock in the corporation;
(iv) The name under which the mortgage lending business is to be conducted;
(v) The name and address of the applicant's resident agent, if any; and
(vi) Any other information that the Commissioner reasonably requires.
(b) With each application, the applicant shall pay to the Commissioner:
(1) A nonrefundable investigation fee of $100; and
(2) A license fee of either:
(i) $1,000 if the applicant applies for a license to be issued on or after January 1 and on or before December 31 of an even-numbered year;
(ii) Effective January 1, 1999, $500 if the applicant applies for a license to be issued on or after January 1 and on or before December 31 of an odd-numbered year; or
(iii) Notwithstanding subparagraph (i) or (ii) of this paragraph, $1,000 if the applicant applies for a license to be issued on or after October 1, 1997 and on or before December 31, 1997.
(c) For each license for which an applicant applies, the applicant shall:
(1) Submit a separate application;
(2) Pay a separate license fee;
(3) If applicable, pay the surcharge; and
(4) File a separate surety bond or other financial guaranty under § 11-508 of this subtitle.
(d) In addition to any sanctions that may be imposed under this subtitle by the Commissioner, a nonrefundable surcharge of $500 shall be paid with an application if the applicant has begun acting as a mortgage lender without a license at the location for which an application is filed.
(e) A person who knowingly makes a false statement under oath on an application filed with the Commissioner under this section is guilty of perjury and, upon conviction, is subject to the penalties set forth in Article 27, § 439 of the Code.
(a) An applicant for a new license or for the renewal of a license shall file a surety bond with each original application and any renewal application for the license.
(b) The surety bond shall:
(1) Run to the Commissioner and be for the benefit of any mortgage loan borrower who has been damaged by a violation committed by a licensee of any law or regulation governing the activities of mortgage lenders;
(2) Be issued by a surety company authorized to do business in the State;
(3) Be conditioned that the applicant shall comply with all Maryland laws regulating the activities of mortgage lenders and mortgage loan lending; and
(4) Be approved by the Commissioner.
(c) If an applicant has not conducted a mortgage lending business any time during the 36 months prior to the filing of an original application for a license, the applicant shall provide a sworn statement setting forth that fact, and shall file with the original application a surety bond in the amount of $15,000.
(d) (1) If an applicant has conducted a mortgage lending business any time during the 36 months prior to the filing of an original or renewal application, the applicant shall provide a sworn statement setting forth the aggregate principal amount of mortgage loans secured or to be secured by property located in Maryland and applied for and accepted or mortgage loans secured or to be secured by property located in Maryland and applied for, procured, and accepted by the mortgage lender during the 12 months immediately preceding the month in which the application is filed.
(2) If an applicant has conducted a mortgage lending business any time during the 36 months prior to the filing of an original application, but during that time has not acted as a mortgage lender in Maryland, the applicant shall provide with the original application a sworn statement setting forth the aggregate principal amount of loans secured or to be secured by residential real property located in states other than Maryland and applied for, procured, and accepted by the mortgage lender during the 12 months preceding the month in which the application is filed.
(3) Except as provided in subsections (c) and (e) of this section, the applicant shall file with the original or renewal application:
(i) Where the aggregate principal amount of loans set forth in the sworn statement was $3,000,000 or less, a surety bond in the amount of $25,000;
(ii) Where the aggregate principal amount of loans set forth in the sworn statement was more than $3,000,000 but not more than $10,000,000, a surety bond in the amount of $50,000; and
(iii) Where the aggregate principal amount of loans set forth in the sworn statement was more than $10,000,000, a surety bond in the amount of $75,000.
(e) Notwithstanding any other provisions of this section, and subject to approval by the Commissioner, if an applicant files five or more original or renewal applications at the same time, the applicant may provide a blanket surety bond for all licensed offices in the amount of $375,000.
(f) Subject to approval by the Commissioner, an applicant for license who files an application for a new license or for the renewal of a license may satisfy the bonding requirement under this section by establishing a trust account with or obtaining an irrevocable letter of credit from a financial institution insured by the Federal Deposit Insurance Corporation in an amount equal to the bond required under this section.
(g) The Commissioner may adopt regulations reasonably necessary to assure that the proper surety bond amount established by this section is maintained by each licensee throughout each licensing term. The regulations may provide for periodic reporting, recalculation, and enforcement of required bond amounts.
(a) When an applicant for a license files the application and bond and pays the fees required by § 11-507 of this subtitle, the Commissioner shall investigate to determine if the applicant meets the requirements of § 11-506 of this subtitle.
(b) (1) Subject to paragraph (2) of this subsection, an applicant for a license who files an application is not subject to the requirements of § 11-506 of this subtitle if the applicant is a federally approved seller-servicer.
(2) An applicant who seeks an exception under this subsection shall furnish to the Commissioner independent evidence that the applicant is a federally approved seller-servicer.
(c) The Commissioner shall approve or deny each application for a license within 60 days after the date when the application and bond are filed and the fees are paid.
(d) The Commissioner shall issue a license to any applicant who meets the requirements of this subtitle.
(a) If an applicant does not meet the requirements of this subtitle, the Commissioner shall:
(1) Immediately notify the applicant in writing of this fact;
(2) Return the bond filed under § 11-508 of this subtitle;
(3) Refund the license fee; and
(4) Keep the investigation fee.
(b) Within 30 days after the Commissioner denies an application, the Commissioner shall:
(1) File in the Commissioner's office a written decision containing the findings and conclusions on which the denial was based;
(2) Send a copy of the decision to the applicant; and
(3) Advise the applicant by certified mail of the applicant's right to a hearing to be held in accordance with the Administrative Procedure Act.
(c) (1) An applicant who seeks a hearing on a license application denial shall file a written request for a hearing within 45 days following receipt of the advice to the applicant of the applicant's right to a hearing.
(2) A hearing date established in response to the filing of a notice under this subsection may be postponed only once for a period of up to 30 days after the initial hearing date.
(a) (1) A license issued on or before September 30, 1997 expires on December 31 of the year in which it was issued, unless the license is renewed for a 2-year term, as provided in this section.
(2) A license issued on or after October 1, 1997 expires on December 31 in each odd-numbered year after December 31, 1997 unless the license is renewed for a 2-year term as provided in this section.
(b) On or before December 1 of the year of expiration, a license may be renewed for an additional 2-year term, if the licensee:
(1) Otherwise is entitled to be licensed;
(2) Pays to the Commissioner a renewal fee of $1,000;
(3) Files a bond or bond continuation certificate for the amount required under § 11-508 of this subtitle; and
(4) Submits to the Commissioner:
(i) A renewal application on the form that the Commissioner requires; and
(ii) Satisfactory evidence of compliance with any continuing education requirements set by regulations adopted by the Commissioner.
(c) If a license is issued for less than 2 full years and is surrendered voluntarily, or is suspended or revoked, the Commissioner may not refund any part of the license fee regardless of the time remaining in the license term.
(d) The Secretary may determine that licenses issued under this subtitle shall expire on a staggered basis.
(a) By July 1, 2000, the Commissioner shall adopt regulations that set continuing education requirements as a condition to the renewal of licenses under this subtitle.
(b) Any continuing education requirements established by the Commissioner under this section shall apply to the first renewal of a license.
(a) (1) A licensee may not change the place of business for which a license is issued unless the licensee:
(i) Notifies the Commissioner in writing of the proposed change; and
(ii) Receives the written approval of the Commissioner.
(2) Within 60 days after receiving a request for approval of a proposed change in the place of business for a licensee, the Commissioner shall approve or deny the request.
(3) If the Commissioner does not approve or deny a request for approval of a proposed change in the place of business for a licensee as provided under paragraph (2) of this subsection, the request shall be deemed approved.
(b) (1) A licensee may not undergo a change in control unless the licensee:
(i) Notifies the Commissioner in writing of the proposed change;
(ii) Makes a written request that the Commissioner approve the proposed change;
(iii) Provides any information the Commissioner may require under paragraph (3) of this subsection; and
(iv) Receives the written approval of the Commissioner.
(2) For purposes of this subsection:
(i) If the licensee is a corporation, "control" means direct or indirect ownership of, or the right to control, 25% or more of the voting shares of the licensee, or the ability to elect a majority of the directors or otherwise effect a change in policy; and
(ii) If the licensee is an entity other than a corporation, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the licensee, whether through the ownership of voting securities, by contract, or otherwise.
(3) Within 60 days after receiving a request for approval of a proposed change in control, the Commissioner may require the licensee to provide any information deemed necessary to determine whether a new application is required because of the proposed change in control.
(4) The Commissioner shall approve or deny a request for approval of a proposed change in control:
(i) Within 60 days after the date the Commissioner receives the request; or
(ii) If the Commissioner requests information from the licensee under paragraph (3) of this subsection, within 60 days after the date the information is received by the Commissioner.
(5) If the Commissioner does not approve or deny a request for approval of a proposed change in control as provided under paragraph (4) of this subsection, the request shall be deemed approved.
(c) In addition to any sanctions which may be imposed under this subtitle by the Commissioner, a licensee who fails to timely provide the notice required under subsection (a)(1) or (b)(1) of this section shall:
(1) For each such failure pay to the Commissioner a surcharge in the amount of $500; and
(2) File with the Commissioner an application for a new license, together with all applicable application and investigation fees.
(a) Each licensee shall keep and make available to the Commissioner at the licensee's place of business any books and records that the Commissioner, by rule or regulation, requires to enable the Commissioner to enforce:
(1) This subtitle;
(2) Any rule or regulation adopted under this subtitle; and
(3) Any other provision regulating the application, making, brokering, or servicing of mortgage loans under Titles 12 through 14 of the Commercial Law Article.
(b) Subject to approval by the Commissioner, nothing in this section is to be construed to prohibit a licensee from maintaining duplicate records or electronic equivalents at the licensee's place of business.
(c) On approval of the Commissioner, a licensee need not keep at the licensee's place of business any books and records otherwise required by the Commissioner under subsection (a) of this section if the licensee:
(1) Is a federally approved seller-servicer;
(2) Makes the books and records available to the Commissioner at the licensee's place of business within 5 business days of the Commissioner's official request; and
(3) Retains the records for at least 25 months in a storage facility disclosed to the Commissioner.
(a) A licensee may surrender a license by sending to the Commissioner the license and a written statement that the license is surrendered.
(b) The surrender of a license does not affect any civil or criminal liability of a licensee for acts committed before the license was surrendered.
(a) (1) The Commissioner shall examine the business of each licensee:
(i) In accordance with a schedule established by the Commissioner; and
(ii) At any other time that the Commissioner reasonably considers necessary.
(2) The schedule established by the Commissioner under paragraph (1)(i) of this subsection shall:
(i) Take into account:
1. The length of time the licensee has been engaged in business as a mortgage lender;
2. Any prior violations by the licensee of the mortgage lending law or regulations;
3. The nature and number of any complaints made against the licensee; and
4. The result of findings from any prior examination of the licensee; and
(ii) Provide that:
1. New licensees shall be examined within 18 months of the date the license is issued; and
2. Each licensee shall be examined at least once during any 36-month period.
(b) (1) Any person aggrieved by the conduct of a licensee under this subtitle in connection with a mortgage loan may file a written complaint with the Commissioner who shall investigate the complaint.
(2) The Commissioner may make any other investigation of any person if the Commissioner has reasonable cause to believe that the person has violated any provision of this subtitle, of any regulation adopted under this subtitle, or of any other law regulating mortgage loan lending in the State.
(c) A licensee shall pay to the Commissioner a fee of not more than $250 per day for each of the Commissioner's employees engaged in:
(1) An examination required under subsection (a)(1) of this section; and
(2) Any other examination or investigation conducted under this section that results in the discovery of a violation of this subtitle by the licensee.
(d) In connection with an examination or investigation made under this section, the Commissioner may:
(1) Examine the books and records of any licensee or of any other person who the Commissioner believes has violated any provision of this subtitle, or any rule or regulation adopted under this subtitle, or of any other law regulating mortgage loan lending in the State;
(2) Subpoena documents or other evidence; and
(3) Summon and examine under oath any person whose testimony the Commissioner requires.
(e) (1) If any person fails to comply with a subpoena or summons of the Commissioner under this subtitle or to testify concerning any matter about which the person may be interrogated under this subtitle, the Commissioner may file a petition for enforcement with the circuit court for any county.
(2) On petition by the Commissioner, the court may order the person to attend and testify or produce evidence.
(a) If the Commissioner finds that the conduct of any other business conceals a violation or evasion of this subtitle or of any rule or regulation adopted under this subtitle, or of any law regulating mortgage loan lending in the State, the Commissioner may issue a written order to a licensee to:
(1) Stop doing business at any place in which the other business is conducted or solicited; or
(2) Stop doing business in association or conjunction with the other business.
(b) A licensee who violates an order of the Commissioner issued under this section shall be subject to the penalties provided by § 11-517 of this subtitle.
(c) The Commissioner may file a petition in the circuit court for any county seeking enforcement of an order under this section.
(a) Subject to the hearing provisions of § 11-518 of this subtitle, the Commissioner may suspend or revoke the license of any licensee if the licensee or any owner, director, officer, member, partner, stockholder, employee, or agent of the licensee:
(1) Makes any material misstatement in an application for a license;
(2) Is convicted under the laws of the United States or of any state of:
(i) A felony; or
(ii) A misdemeanor that is directly related to the fitness and qualification of the person to engage in the mortgage lending business;
(3) In connection with any mortgage loan or loan application transaction:
(i) Commits any fraud;
(ii) Engages in any illegal or dishonest activities; or
(iii) Misrepresents or fails to disclose any material facts to anyone entitled to that information;
(4) Violates any provision of this subtitle or any rule or regulation adopted under it or any other law regulating mortgage loan lending in the State; or
(5) Otherwise demonstrates unworthiness, bad faith, dishonesty, or any other quality that indicates that the business of the licensee has not been or will not be conducted honestly, fairly, equitably, and efficiently.
(b) In determining whether the license of a licensee should be suspended or revoked for a reason described in subsection (a)(2) of this section, the Commissioner shall consider:
(1) The nature of the crime;
(2) The relationship of the crime to the activities authorized by the license;
(3) With respect to a felony, the relevance of the conviction to the fitness and qualification of the licensee to engage in the mortgage lending business;
(4) The length of time since the conviction; and
(5) The behavior and activities of the licensee since the conviction.
(c) (1) The Commissioner may enforce the provisions of this subtitle, regulations adopted under § 11-503 of this subtitle, and the applicable provisions of Title 12 of the Commercial Law Article by:
(i) Issuing an order:
1. To cease and desist from the violation and any further similar violations; and
2. Requiring the violator to take affirmative action to correct the violation including the restitution of money or property to any person aggrieved by the violation; and
(ii) Imposing a civil penalty not exceeding $1,000 for each violation.
(2) If a violator fails to comply with an order issued under paragraph (1)(i) of this subsection, the Commissioner may impose a civil penalty not exceeding $1,000 for each violation from which the violator failed to cease and desist or for which the violator failed to take affirmative action to correct.
(d) The Commissioner may file a petition in the circuit court for any county seeking enforcement of an order issued under this section.
(e) In determining the amount of financial penalty to be imposed under subsection (c) of this section, the Commissioner shall consider:
(1) The seriousness of the violation;
(2) The good faith of the violator;
(3) The violator's history of previous violations;
(4) The deleterious effect of the violation on the public and mortgage industry;
(5) The assets of the violator; and
(6) Any other factors relevant to the determination of the financial penalty.
(a) Before the Commissioner takes any action under § 11-516 or § 11-517 of this subtitle, the Commissioner shall give the licensee an opportunity for a hearing.
(b) Notice of the hearing shall be given and the hearing shall be held in accordance with the Administrative Procedure Act.
(c) The hearing notice to the licensee shall be sent by certified mail, return receipt requested, to the principal place of business of the licensee at least 30 days before the hearing.
The Commissioner may reinstate a suspended license or issue a new license to a person whose license has been revoked if, after investigation, the Commissioner is satisfied that the conditions that were the cause for the suspension or revocation have been corrected and are unlikely to recur.
A mortgage lender may not do business under any trade name that misrepresents or tends to misrepresent that the mortgage lender is:
(1) A bank, trust company, or savings bank;
(2) A savings and loan association;
(3) A credit union; or
(4) An insurance company.
(a) A mortgage lender shall require a borrower to furnish the mortgage lender with independent evidence of the commercial purpose of the loan where the loan is:
(1) Secured, in whole or in part, by any interest in residential real property in Maryland; and
(2) In excess of $75,000.
(b) Other than the requirements of subsection (a) of this section, a mortgage lender is not required to make an independent investigation to obtain independent evidence of the commercial purpose.
(a) In this section, "approved servicer" means a mortgage lender as defined under § 11-501(j)(1)(iii) of this subtitle that is a federally approved seller-servicer.
(b) A mortgage lender that engages in the business of servicing mortgage loans for the lender or assignee of the mortgage loan or collecting or otherwise receiving mortgage loan payments directly from borrowers for distribution to the lender or assignee of the mortgage loan is not subject to the licensing and bonding requirements of this subtitle if the servicer is an approved servicer.
(c) An approved servicer that services mortgage loans originally made in this State shall:
(1) Register with the Commissioner on or before each January 1; and
(2) (i) File annually with the Commissioner information satisfactory to the Commissioner that the mortgage lender should be exempt from the licensing and bonding requirements of this subtitle; and
(ii) Provide to the Commissioner documentation that the mortgage lender is a federally approved seller-servicer.
(d) This section does not apply to any approved servicer that makes or brokers any mortgage loan in this State.
(a) Any person who willfully violates any provision of this subtitle or any rule or regulation adopted under it is guilty of a felony and on conviction is subject to a fine not exceeding $50,000 or imprisonment not exceeding 10 years or both.
(b) Any unlicensed person who is not exempt from licensing under this subtitle who makes or assists a borrower in obtaining a mortgage loan in violation of this subtitle may collect only the principal amount of the loan and may not collect any interest, costs, finder's fees, broker fees, or other charges with respect to the loan.
(c) Any mortgage lender or employee or agent of a mortgage lender who willfully misappropriates or intentionally and fraudulently converts to the mortgage lender's or to the mortgage lender's employee's or agent's own use moneys in excess of $300 rightfully belonging to a borrower, or who otherwise commits any fraudulent act in the course of engaging in the mortgage lending business is guilty of a felony and on conviction is subject to a fine not to exceed $100,000 or imprisonment not exceeding 15 years or both.
This subtitle may be cited as the Maryland Mortgage Lender Law.