The Maryland Office of Financial Regulation (OFR) is providing updated guidance to clarify licensing rules for federal agencies and their partners involved in mortgage lending. This follows the guidance issued on January 10, 2025, and is based on the court’s decision in Estate of Brown v. Ward (2024).

The court ruled that entities acquiring revolving credit plans and closed-end credit agreements are subject to the same licensing obligations as the original lender, ensuring accountability and consumer protection. In response, OFR has enacted emergency regulations that took effect January 10, 2025, providing mortgage trusts with a clear pathway to compliance. These regulations define “passive trusts,” simplify net worth requirements, and establish licensing procedures to facilitate adherence to state law. To encourage compliance, OFR has suspended enforcement actions until April 10, 2025, allowing affected entities time to obtain necessary licenses.

The Association and industry partners have made it clear to OFR how damaging this requirement could be, especially on the secondary market, and the advocacy team is working on a legislative fix to this issue to clarify that mortgage trusts should be exempt from licensing.

Additionally, OFR has issued supplemental guidance to make it clear that existing laws already have specific exemptions and exclusions. The Brown decision and OFR’s guidance do not change these exemptions, especially for organizations connected to the federal government such as :

• The Federal Home Loan Mortgage Corporation (Freddie Mac)
• The Federal National Mortgage Association (Fannie Mae)
• The Government National Mortgage Association (Ginnie Mae)

The supplemental guidance reinforces that federal mortgage trusts do not require state licensure, ensuring continuity in federal mortgage lending operations while maintaining compliance with Maryland’s regulatory framework.