With all eyes on Washington, DC, and the press abuzz with each movement and action of the newly sworn-in President Trump, Maryland quietly published in the January 20, 2017 issue of the Maryland Register a highly-anticipated request for comment and proposed revisions to its regulations governing a wide range of mortgage finance licensing and practice requirements. Specifically, Maryland seeks to amend the Mortgage Lender, Mortgage Loan Originator (“MLO”), Recordation of Security Instruments for Residential Real Property and Foreclosure Procedures for Residential Real Property regulations. Despite the quiet publication of the proposed regulations, this proposal is actually many months in the making. Over the past two years, Maryland has been communicating both internally and with industry stakeholders to bring much-needed revisions to the regulations. As such, the published proposal addresses the following changes:

  • Addition and clarification of certain definitions, including “initial application,” “mortgage servicing right,” and “transfer of servicing rights”
  • Addition of requirements related to mortgage servicing transfers, which directly affects certain persons who hold mortgage servicing rights
  • Addition of provisions related to electronic records, provision of records to the Commissioner, and loss of records
  • Establishment of data protection standards
  • Allowances to substitute compliance with certain federal laws and regulations for compliance with certain Maryland laws and regulations
  • Specification of the process for obtaining approval of a trade name
  • Alignment of the record-keeping requirements with the statutorily-mandated examination cycle
  • Clarification of the Commissioner’s requirements related to the delivery and receipt of mortgage disclosures
  • Clarification of the Commissioner’s requirements related to the supervision of MLOs
  • Clarification of  the requirement to make certain reports to the Commissioner
  • Clarification of the MLO license application approval and denial process
  • Clarification of the MLO prelicening and continuing education requirements
  • Permission for MLOs to conduct mortgage lending business at certain limited locations that are different from the location appearing on the employer’s license(s)
  • Permission to conduct loan origination activities under an expired license in a certain limited situation
  • Permission for secured party to include the NMLS unique identifier on a security instrument and a notice of intent to foreclose

The Commissioner has not scheduled a public hearing on the proposed regulations, but will accept comments through March 6, 2017.  Interested persons may send comments to Jedd Bellman, Assistant Commissioner, Office of the Commissioner of Financial Regulation, 500 N Calvert Street, Room 402, Baltimore, Maryland 21202; or call 410-230-6390, email jedd.bellman@maryland.gov, or fax 410-333-0475.

We will be reviewing these proposals in greater detail, so should you need assistance submitting comments or have any questions about the Maryland proposals or licensing questions generally, please let us know, as we can help.

New regulations will impose increased inspection, reporting, and maintenance obligations on mortgagees and servicers of defaulted residential mortgage loans in New York.  You can learn more about the regulations of the New York Department of Financial Services for “zombie” properties in Mayer Brown’s latest Legal Update.  The regulations become effective today, December 20, 2016.

On November 3, in a case that was closely watched by industry participants, the Florida Supreme Court held that a mortgagor’s default that occurs after the dismissal of a prior foreclosure action in which the loan payments were accelerated resets the five-year statute of limitations for filing a subsequent foreclosure suit.  In Bartram v. U.S. Bank, N.A., the court explained that dismissal of the initial foreclosure action has the effect of returning the parties to their pre-foreclosure complaint status, where the mortgage remains an installment loan and the mortgagor has the right to continue to make installment payments without being obligated to pay the entire amount due under the note and mortgage. Continue Reading Florida Supreme Court Holds that Each Default Resets the Statute of Limitations for Filing a Foreclosure Complaint

Until recently, Florida courts had not determined what happens to liens placed on a property between the time of final judgment of foreclosure and sale. On August 24, 2016, Florida’s Fourth Appellate District decided Ober v. Town of Lauderdale-by-the-Sea, which resolved the issue, holding that liens placed on the property after the final judgment of foreclosure but prior to judicial sale are not discharged by Florida’s lis pendens statute. Continue Reading Florida Appeals Court Holds That Post-Foreclosure Judgment Liens Are Not Discharged At Sale