Do mortgage brokers have additional obligations under the new law?
The plain language of Chapter 532 indicates that it applies to “lenders” under CL, Title 12, Subtitles 1, 3 and 4; and to “credit grantors” under Subtitle 10. Except for covered loans made under the Maryland Secondary Mortgage Loan Law (Subtitle 4) mortgage brokers do not meet the definition of “lenders”; and, therefore, have no responsibilities under the new law. However, under Subtitle 4, the term “lender’ also includes all mortgage lender licensees (which includes brokers). thus, the requirement to provide a written recommendation for home buyer education or housing counseling, and a list of approved agencies and organizations under CL, 12-409.1(c) applies to brokers as well as to the lenders who make the covered loans. Since brokers, by definition, do not make the loans, the provisions prohibiting financing single premium insurance and requiring due regard for ability to repay do not apply to brokers. 4. What is due regard for a borrower’s ability to repay? In its most basic terms,
