Secondary Markets and Securitization

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On October 1, 2025, the interagency final rule implementing quality control standards for automated valuation models (“AVMs”) became effective. The rule requires the adoption and maintenance of policies, practices, procedures, and control systems for the use of AVMs by mortgage originators in making credit decisions, and by secondary market issuers that use AVMs…

The Securities and Exchange Commission (SEC) has published a concept release inviting public comment on potential reforms to disclosure requirements for residential mortgage-backed securities (RMBS) in the registered asset-backed securities (ABS) market. The initiative aims to address longstanding concerns that current rules, particularly those under Item 1125 of Regulation AB, have stifled public issuance of…

Maryland’s secondary mortgage market has been in turmoil since a disruptive 2024 court decision held that a purchaser of mortgage loans inherits the original lender’s obligations—including the obligation to obtain a Maryland Mortgage Lender license. Secondary market investors that acquire residential mortgage loans through a passive trust can breathe a sigh of relief now that…

Mayer Brown has published a new edition of Licensing Link, a periodic publication that will keep you informed on hot topics and new developments in state licensing laws, and provide practice tips and primers on important issues related to state licensing across the spectrum of asset classes and financial services activities.

In this issue, we…

Mayer Brown serves as a trusted advisor to our clients in the consumer financial services industry, a role that we cherish and constantly strive to improve.

In this report, we provide a snapshot of our 2024 consumer financial services representative engagements and how we helped industry participants navigate the terrain. It also provides links to…

There were positive developments last week in connection with the recently announced licensing requirements for assignees of residential mortgage loans and installment loans in Maryland — a proposed legislative fix, an extended enforcement deadline, and a clarifying exception from the requirement.

As we discussed in our Legal Update last month, the Maryland Office of Financial Regulation (OFR) asserted 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 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.

That guidance has caused significant turmoil in the Maryland residential mortgage markets, with significant practical concerns about requiring passive trusts to obtain a license and with certain industry participants suspending the purchase of Maryland mortgage loans.

To address these concerns, the OFR worked with industry participants to develop proposed legislation, the Maryland Secondary Market Stability Act of 2025 — two identical bills, Senate Bill 1026 and House Bill 1516, introduced on February 17, 2025.Continue Reading Update on Maryland Licensing for Loan Assignees

In response to the significant ambiguities raised by New Hampshire’s recent amendments to its Motor Vehicle Retail Installment Sales Act — not to mention their immediate effectiveness and draconian liability provisions — the state’s Banking Department has issued several nuggets of guidance.

Recently, the Department sought to address the pressing question of whether persons involved in various financing transactions and securitizations involving motor vehicle retail installment contracts must now obtain a license. As of August 26, 2024, the Department’s web site states that securitization trusts that are established for the purpose of pooling retail installment contracts and reconstituting them into securities are not required to obtain a sales finance company license in the state. While the Department stated further that the licensing requirement will typically be fulfilled by the servicer or other entity responsible for servicing the contracts in the securitization trust, it did not expressly address the licensing obligations applicable in other types of financing transactions or to other types of special purpose entities. We expect that a similar licensing exemption would apply to those transactions and entities, because the servicer would need to be licensed or an exempt entity.Continue Reading New Hampshire Banking Department Clarifies Licensing for Motor Vehicle Financing

Transactions involving the purchase and sale of residential mortgage loans and mortgage servicing rights (“MSRs”) frequently raise the question of whether they require submitting premerger notification filings to the Federal Trade Commission and the Department of Justice under the Hart-Scott-Rodino (“HSR”) Act. This Legal Update provides an overview of how residential mortgage loans, MSRs and…

While residential mortgage lenders are facing tough headwinds driven by rising interest rates and low housing volume, the current market presents opportunities for savvy investors looking at mortgage servicing rights (“MSRs”). The current mortgage market is supported by non-bank mortgage originators and servicers who lack the same access to capital and liquidity as traditional banks.

Last Thursday, the CFPB announced in a blog post that it is considering revising its mortgage servicing rules.  This development follows a request for information from the CFPB last fall seeking public input on, among other things, streamlined loss mitigation options.  The CFPB’s current mortgage servicing rules were promulgated in the wake of the foreclosure crisis and took effect in 2014.  Among other things, the rules create a framework for default servicing under which servicers must evaluate loss mitigation applications according to a prescribed process with deadlines and notice requirements.  The COVID-19 pandemic put this loss mitigation framework to the test as the number of borrowers who had trouble paying their mortgages skyrocketed.Continue Reading CFPB Announces Plans to Streamline Mortgage Servicing Rules