Maryland has revised its licensing statute to conform to the federal SAFE Act. The new law requires new license applicants to use the NMLS to apply, starting in early May, 2009. Existing licensees who need to renew their licenses until July 1, 2009 will use the Maryland online system to renew. Existing licensees who do not need to renew their licenses until after July 1, 2009 will be required to transition to the NMLS starting in July, 2009 and will have up to 18 months to transition. If you need to renew your license during the transition period, you will renew on the NMLS. New licenses will be for up to a 1-year period and will expire on December 31st, like all other licenses obtained through the NMLS.
The new law also requires mortgage loan originators to be individually licensed, which requires the applicant to take 20 hours of pre-licensing education, to pass an exam in order to get licensed, pass a criminal background check and a regulatory background check. A mortgage loan originator will not be approved for a license if he has had a license from another state revoked or if during the prior 7-year period pleaded guilty, nolo contendere or been convicted of a felony. If the felony was for an act involving fraud, dishonesty, breach of trust, or money laundering, the application will be denied no matter how far in the past the conviction or nolo contendere plea was. After licensing is approved, the mortgage loan originator will be required to complete 8 hours of continuing education annually.
Mortgage loan originators who are not employed by a licensee can place their license in a “nonactive” status until re-employed by a different licensee.
Showing posts with label Maryland licensed lender. Show all posts
Showing posts with label Maryland licensed lender. Show all posts
Tuesday, May 5, 2009
Monday, June 30, 2008
New Net Worth Requirements in Maryland
Effective June 1, 2008, Maryland licensed lenders (and that includes brokers) must meet new net worth requirements in order to get approved and renew their license. Remember, net worth equals assets minus liabilities. If you are a broker or table –funding a loan (but your name is not on the mortgage), the minimum net worth that is required is $25,000. For lenders, the minimum net worth is a sliding scale, based on the amount of lending you did in the previous 12 months. If your loans totaled $1,000,000, your minimum net worth must be at least $25,000. If you lent between $1,000,000 and $5,000,000, your minimum net worth must be at least $50,000. And, if you lent more than $5,000,000, you need a minimum net worth of $100,000. As of January 1, 2009, if you are a lender with mortgages of more than $10,000,000, your minimum net worth requirement increases to $250,000.00.
You can satisfy the requirement with cash, a line of credit (brokers cannot use a line of credit), or other assets. A line of credit cannot be used for more than 75% of the net worth. You can show proof of your net worth by submitting a certified financial statement, certified by a principal of the licensee and compiled, reviewed, or audited by a certified public accountant. If cash is used as the sole qualifying asset, you can submit a letter from your bank. If a line of credit is used, you must submit a copy of the line of credit agreement.
You can satisfy the requirement with cash, a line of credit (brokers cannot use a line of credit), or other assets. A line of credit cannot be used for more than 75% of the net worth. You can show proof of your net worth by submitting a certified financial statement, certified by a principal of the licensee and compiled, reviewed, or audited by a certified public accountant. If cash is used as the sole qualifying asset, you can submit a letter from your bank. If a line of credit is used, you must submit a copy of the line of credit agreement.
Wednesday, May 14, 2008
New Requirements in Maryland
Maryland has new laws taking effect on June 1, 2008 that affect licensed lenders (which also includes mortgage brokers). The new requirements concern surety bonds and minimum net worths for licensees.
Maryland has always had a system of requiring surety bonds based on the volume of business in the previous 12 months. Effective June 1, 2008, if your company has done no business anywhere in the prior 12 months (you are a start-up) or up to $3,000,000 in closed mortgage loans, you will need a $50,000 bond. If you closed more than $3,000,000 but less than $10,000,000 in mortgage loans, you need a $100,000 bond. If your closed volume is more than $10,000,000 in the previous 12 months, you need a $150,000 bond. If your company has multiple offices, the largest surety bond you will need for all of the offices combined is $750,000.
Additionally, mortgage lender licensees will need a net worth of $25,000 if your company had no activity or up to $1,000,000 in loans closed in the previous 12 months. If you closed more than $1,000,000 and less than $5,000,000, you need at least $50,000 in net worth. If your dollar volume of loans closed was more than $5,000,000 you need a net worth of at least $100,000. Starting January 1, 2009, if you closed more than $10,000,000 in mortgage loans in the previous 12 months, you will be required to maintain a minimum net worth of $250,000.
Proof of compliance with the new net worth and surety bond obligations will be required when you renew your license or if you are being examined.
Maryland has always had a system of requiring surety bonds based on the volume of business in the previous 12 months. Effective June 1, 2008, if your company has done no business anywhere in the prior 12 months (you are a start-up) or up to $3,000,000 in closed mortgage loans, you will need a $50,000 bond. If you closed more than $3,000,000 but less than $10,000,000 in mortgage loans, you need a $100,000 bond. If your closed volume is more than $10,000,000 in the previous 12 months, you need a $150,000 bond. If your company has multiple offices, the largest surety bond you will need for all of the offices combined is $750,000.
Additionally, mortgage lender licensees will need a net worth of $25,000 if your company had no activity or up to $1,000,000 in loans closed in the previous 12 months. If you closed more than $1,000,000 and less than $5,000,000, you need at least $50,000 in net worth. If your dollar volume of loans closed was more than $5,000,000 you need a net worth of at least $100,000. Starting January 1, 2009, if you closed more than $10,000,000 in mortgage loans in the previous 12 months, you will be required to maintain a minimum net worth of $250,000.
Proof of compliance with the new net worth and surety bond obligations will be required when you renew your license or if you are being examined.
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