The Maryland Office of Financial Regulation (OFR) has released guidance to explain licensing rules for people and companies involved in mortgage lending, including mortgage trusts. This guidance is based on a court decision in the Estate of Brown v. Ward case, which states that mortgage trusts and their assignees must follow Maryland’s licensing laws. These rules apply to all types of mortgage loans, including revolving credit plans (OPEC) and closed-end credit agreements (CLEC).

Industry Guidance and Compliance
To help with compliance, OFR has issued emergency regulations that started on January 10, 2025. These regulations allow mortgage trusts to get the necessary licenses without too much trouble. OFR encourages those affected to review the new rules, start the licensing process right away, and ask for help if needed. To give people time, OFR will pause enforcement of these rules until April 10, 2025, to let mortgage trusts apply for licenses.

The Estate of Brown v. Ward decision clarified that anyone who takes over a loan (an assignee) inherits the same responsibilities as the original lender, including the need to be licensed.

Emergency Regulations
OFR has created emergency regulations to help mortgage trusts follow the rules set by the Estate of Brown court decision. These regulations are temporary and will expire on June 16, 2025. OFR has also proposed making these rules permanent and is accepting public comments.

Here’s what the emergency regulations do:

1. Allow Mortgage Trust Licensing: They include “passive trusts” (trusts that acquire but don’t create, broker, or manage mortgage loans) in licensing rules. Passive trusts can name a trustee or a key officer as their qualifying individual.
2. Simplify the Newt Worth Requirement: Passive trusts can meet the statutory net worth requirement by providing evidence of assets, such as securitized mortgage pools, that will be held within 90 days of getting a license.
3. Clarify Licensing Procedures: The rules outline clear procedures for passive trusts to follow Maryland’s mortgage licensing laws.