Code of Maryland Regulations
Title 09 - MARYLAND DEPARTMENT OF LABOR
Subtitle 03 - COMMISSIONER OF FINANCIAL REGULATION
Chapter 09.03.06 - Mortgage Lending
Section 09.03.06.02 - Definitions
Universal Citation: MD Code Reg 09.03.06.02
Current through Register Vol. 51, No. 19, September 20, 2024
A. In this chapter, the following terms have the meanings indicated.
B. Terms Defined.
(1) "Advertisement" means a statement in any
medium used or intended to induce any person to apply for a mortgage
loan.
(2) "Annual percentage rate
(APR)" has the meaning stated in 12 CFR Part 1026, as it may be amended from
time to time.
(3) Applicant.
(a) "Applicant" means a borrower who has not
received a commitment from a licensee to make the loan requested.
(b) "Applicant" does not include a person
whose request for a mortgage loan has been denied.
(4) "Average prime offer rate" has the
meaning stated in 12 CFR Part 1026, as it may be amended from time to
time.
(5) "Borrower" has the
meaning stated in Financial Institutions Article, §11-501,
Annotated Code of Maryland.
(6)
"Breach of the security of a system" has the meaning stated in Commercial Law
Article, §14-3504, Annotated
Code of Maryland.
(7) Broker.
(a) This section defines whether a person is
acting as a broker or a lender in a particular transaction.
(b) For purposes of all Maryland laws and
regulation applicable to mortgage lenders, a person is acting as a broker if:
(i) The person aids or assists a borrower in
obtaining a mortgage loan for a fee or other valuable consideration;
and
(ii) The creditor identified in
the loan documents is a different person than the person described in
§B(7)(b)(i) of this regulation.
(c) There is no broker in a transaction
solely because the lender contracts with a third party for processing or
underwriting services if:
(i) The person
contracting to perform the processing or underwriting did not generate the loan
application; and
(ii) The loan is
closed in the name of the lender which did generate the loan
application.
(8) "Commissioner" has the meaning stated in
Financial Institutions Article, §1-101,
Annotated Code of Maryland.
(9)
"Commitment" has the meaning stated in Commercial Law Article, §12-125(a)(3),
Annotated Code of Maryland.
(10)
"Corporate governance" means the management structure of the licensee and the
processes by which the business is managed, including the corporate controls,
rules, policies, processes, and practices used to oversee and manage the
institution.
(11) "Customer
information" has the meaning stated in 16 CFR Part 314, as it may be amended
from time to time.
(12) "Dwelling"
has the meaning stated in Financial Institutions Article, §11-501,
Annotated Code of Maryland.
(13)
"Electronic record" has the meaning stated in Commercial Law Article, §21-101(h),
Annotated Code of Maryland.
(14)
"Escrow account" has the meaning stated in Commercial Law Article, §12-109(a)(3),
Annotated Code of Maryland.
(15)
"External audit" means the formal report prepared by an independent certified
public accountant expressing an opinion on whether the financial statements are
presented fairly, in all material aspects, in accordance with the applicable
financial reporting framework, and is inclusive of an evaluation of the
adequacy of a company's internal control structure.
(16) "Financing agreement" has the meaning
stated in Commercial Law Article, §12-125(a)(4),
Annotated Code of Maryland.
(17)
"Fully indexed rate" has the meaning stated in 12 CFR Part 1026, as it may be
amended from time to time.
(18)
"Higher-priced mortgage loan" has the meaning stated in 12 CFR Part 1026, as it
may amended from time to time
(19)
"Information security program" has the meaning stated in
16 CFR
314.2, as it may be amended from time to
time.
(20) "Initial application"
means the submission of a borrower's financial information in anticipation of a
credit decision relating to a mortgage loan, which shall include the borrower's
name, the borrower's monthly income, the borrower's social security number to
obtain a credit report, the property address, an estimate of the value of the
property, and the mortgage loan amount sought
(21) "Internal audit" means the internal
independent and objective assurance and consulting activity performed to
evaluate and improve the effectiveness of a licensee's operations, risk
management, internal controls, and governance processes.
(22) Lender.
(a) "Lender" means a person who makes a
mortgage loan.
(b) "Lender", as
used in these regulations, does not include a person acting as a:
(i) Mortgage broker; or
(ii) Mortgage servicer.
(23) "License" has the meaning
stated in Financial Institutions Article, §11-501,
Annotated Code of Maryland.
(24)
"Licensee" has the meaning stated in Financial Institutions Article, §11-501,
Annotated Code of Maryland.
(25)
"Loan" as used in these regulations, unless the context indicates otherwise,
means a mortgage loan.
(26) "Loan
application" has the meaning stated in Financial Institutions Article, §11-501,
Annotated Code of Maryland.
(27)
"Loss mitigation option" has the meaning stated in 12 C.F.R. Part 1024, as it
may be amended from time to time.
(28) "Mortgage lender" has the meaning stated
in Financial Institutions Article, §11-501,
Annotated Code of Maryland.
(29)
"Mortgage loan" has the meaning stated in Financial Institutions Article,
§11-501,
Annotated Code of Maryland.
(30)
"Mortgage loan originator" has the meaning stated in Financial Institutions
Article, §11-601,
Annotated Code of Maryland.
(31)
Mortgage Servicer.
(a) "Mortgage servicer" has
the meaning stated in Financial Institutions Article, §11-501,
Annotated Code of Maryland.
(b)
"Mortgage servicer" includes a person that engages in one or more of the
following actions for the benefit of other persons in connection with mortgage
loans;
(i) Performs the routine
administration of mortgage loans as agent of a servicer or MSR investor under
the terms of a subservicing contract;
(ii) Invests in and owns mortgage servicing
rights and relies on subservicers to administer the mortgage loans on its
behalf;
(iii) Collects or receives
payments directly from borrowers for distribution to the owner of the mortgage
loan or another third party, including a master servicer:
(iv) Evaluates borrower eligibility for loss
mitigation options;
(v)
Communicates with the borrower regarding loss mitigation options;
(vi) Is responsible for supervision of third
parties that take action to protect a secured party's interest in the property
under the applicable security instrument, such as maintenance of hazard and
mortgage insurance coverage and preservation of the property; or
(vii) Conducts or supervises the foreclosure
process, except if the person is an attorney representing a mortgagee or its
successors and assigns, or acting as a substitute trustee in a foreclosure
action under a deed of trust.
(32) "Mortgage servicing rights" or "MSR"
means the contractual right to service a mortgage loan on behalf of the owner
of the associated mortgage in exchange for specified compensation in accordance
with the servicing contract.
(33)
"MSR Investor" means a person who invests in and owns mortgage servicing rights
and relies upon subservicers to administer the mortgage loans on the person's
behalf, and who may be referred to as a master servicer.
(34) "NMLS" has the meaning stated in Financial
Institutions Article, §1-101,
Annotated Code of Maryland.
(35)
"Person" has the meaning stated in Financial Institutions Article, §11-501,
Annotated Code of Maryland.
(36)
"Processing", when used in the context of processing a loan application, means
the:
(a) Collection of data, documents, and
other materials which a lender or broker requires in order to evaluate whether
a loan will be granted or denied;
(b) Preparation of all materials necessary
for closing a loan; and
(c)
Scheduling of the closing of a loan.
(37) "Residential real estate" has the
meaning stated in Financial Institutions Article, §11-501,
Annotated Code of Maryland.
(38)
"Risk management program" means the policies, procedures, and internal controls
designed to identify, measure, monitor and mitigate risk.
(39) "Serviceprovider" has the meaning stated
in 16 CFR Part 314, as it may be amended from time to time.
(40) Social Media.
(a) "Social media" means an Internet website
or application software that:
(i) Requires a
person to register or create an account to become a member; and
(ii) Allows two or more members to
communicate directly with one another.
(b) "Social media" includes an Internet
website or application software that allows members to communicate by means of
one or more of the following:
(i)
Text;
(ii) Video;
(iii) Still photograph; or
(iv) Audio.
(c) "Social media" does not include an
electronic mail account.
(41) "Subservicer" means a person performing
the routine administration of mortgage loans as an agent of a servicer or MSR
investor under the terms of a subservicing contract.
(42) "Trade name" means any word or group of
words used to identify a business to the public.
(43) "Underwriting" means the evaluation of
information and materials about the loan, the applicant, and the property which
will secure the loan, to determine whether the loan will be made or
denied.
Disclaimer: These regulations may not be the most recent version. Maryland may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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