Home Loans In Maryland
Mortgage licensee may not allow any note, or loan contract, mortgage, or evidence of indebtedness
secured by a secondary mortgage or deed of trust to:
Be signed or executed at any place for which the person does not have a license except at attorney
or title company offices.
Be
signed or executed at any place for which the originator's lender has a branch
office.
Be
signed or executed at any place for which the person does not have a license
Be
signed or executed at the lender's principal office.
A licensee may not allow any note, or loan contract, mortgage, or evidence of indebtedness
secured by a secondary mortgage or deed of trust to be signed or executed
at any place for which the person does not have a license,
except at the office of (1) the attorney for the borrower or for the licensee;
or (2) a title insurance company, title company or
an attorney for a title insurance
company or a title company.
Lenders may not require borrowers or title insurance companies
to perform a title
search as a settlement condition if:
Borrower notifies lender within seven (7) business days after loan application
of name
and address of borrowers choice.
Borrower notifies lender within seven (7) days after loan application of
name and
address of borrowers choice.
Borrower notifies lender within three (3) days after loan application of name
and
address of borrowers choice.
Borrower notifies lender within five (5) days after loan application of name
and address
of borrowers choice.
A lender may not require a borrower or title insurance company to perform a title search,
examination of title or closing as a settlement condition if the
borrower notifies the lender within 7 days after the loan application of the name
and business address of the borrower's choice.
Any lender, his officer or employee and any other person
who willfully violates state and federal law is
guilty of a misdemeanor and on conviction is:
Subject
to a fine not exceeding $1,000 per violation.
Subject
to a fine not exceeding $5,000 or imprisonment not exceeding one year or both.
Subject
to a fine not exceeding $1,000 or imprisonment not exceeding one year or both.
Subject
to criminal penalties and imprisonment up to five years.
A person who violates any State or Federal law in the state of Maryland
is guilty of a misdemeanor and on conviction is subject to imprisonment
not exceeding one
year or a fine not exceeding $1,000 or both.
Lender
inspection fees are permitted under the following circumstances:
To
support real estate appraiser's independent estimate of value.
To
establish existence of real property for documentation when using local tax
base to establish value.
To
verify that a house is actually located on the property.
To determine completion of new home construction and to verify
completion of
repairs required by lender as a condition of approval.
Lenders are not allowed to impose inspection fees except when needed to determine
completion of: (1) construction of a new home; or (2) repairs,
alterations or
other work required by the lender.
Loan Origination fees are permitted in Maryland subject to
certain restrictions which include:
$1,000 or 10% of net proceeds of a commercial loan of $75,000 or
less or $500 of 10%
of net proceeds of any other loan made.
$500 or 10% of net proceeds of a residential mortgage loan of $75,000
or less or
$250 or 10% of net proceeds of any other loan made.
$500 or 10% of net proceeds of a commercial loan of $75,000 or less
or $250 or 10%
of net proceeds of any other loan made plus commission, finder's fees, points.
$500 or 10% of net proceeds of a commercial loan of $75,000 or less or $250
or 10%
of net proceeds of any other loan made.
A lender may collect a loan origination fee for making a loan subject to the following restrictions:
(1) the aggregate amount of the loan origination fee imposed by a lender -
when combined with any finder's fee imposed by a mortgage broker
may not exceed: (a) $500 or 10% of the net proceeds of a
commercial loan of $75,000 or less; or (b) $250 or 10% of the net proceeds of any other loan;
(2) a lender may not collect from the borrower any other commission,
finder's fee or points for obtaining, procuring or placing a loan;
(3) Origination fees are not permitted on secondary market purchase loans
compliant to Federal Agency investors including but not limited to
GNMA, FNMA, FHLMC, the Federal
Reserve Bank and the Farmers Home Administration.
When the Commissioner investigates complaints brought by
parties aggrieved by the
licensee, the licensee will:
Pay to the Commissioner a per-day fee set by the Commissioner for each of the
Commissioner's employees engaged in the investigation.
Pay
to the Commissioner full reimbursement for State employees engaged in the
investigation.
Pay to the Commissioner an upfront fee of $2500 plus a per-diem fee set by the
Commissioner
for each of the Commissioner's employees engaged in the investigation.
Pay
a flat fee of $5,000 to the Commissioner to cover costs of the state's
investigation and examination.
Any person aggrieved by the conduct of a licensee in connection with a
mortgage loan may file a written compliant with the Commissioner
who shall investigate the compliant. A licensee shall pay to the
Commissioner a per-day fee set by the Commissioner
for each of the Commissioner's employees engaged in any
examination or investigation conducted.
Upon issuance of a "Cease and Desist Order" by the Commissioner,
the
licensee may be required to:
Terminate employment of the employee who committed the violation thereby
eliminating the
source of the violation.
To cease and desist from violation and take affirmative action to correct the violation
including the restitution of money or property to any person aggrieved
by the violation.
Terminate
employment of the employee who committed the violation, thereby relieving the
lender of liability.
To
cease and desist from the violation and any further similar violations.
Upon issuance of a "Cease and Desist Order" by the Commissioner,
the licensee may be required to cease and desist from the violation
and any further similar violations and take affirmative action to correct
the violation
including the restitution of money or property to any person aggrieved by the
violation.
Any unlicensed person who is not exempt from licensing
who makes or assists a borrower in obtaining a mortgage loan
in violation of Maryland mortgage law may
collect:
The principal amount of the loan only and must reimburse the borrower
all fees and charges collected by the unlicensed person
plus rebate 15% of interest charges
previously collected.
The principal amount of the loan and any interest, costs, finder's fees, broker fees,
or other charges with respect to the loan.
Any
interest, costs, broker fees, or other charges with respect to the loan.
The principal amount of the loan and may not collect any interest, costs,
finder's
fees, broker fees, or other charges with respect to the loan.
Any unlicensed person who is not exempt from licensing and
who assists a borrower in obtaining a mortgage loan may
collect only the principal amount of the loan and may not collect any interest,
costs, finder's fees, brokers fees or other
charges with respect to the loan.
Exempted
institutions employing Registered Mortgage Originators are:
Relieved of any responsibility required by federal or state rules,
laws, or regulations
governing mortgage lending in the State.
Compliant to federal and state mortgage rules, laws, or regulations
and receive
exemptions from certain penalties established by the Commissioner's Office.
Relieved of responsibility required by state rules, laws,
or regulations governing mortgage lending in the State;
but not relieved from Federal regulation and
statutes.
Not relieved of any responsibility required by federal or state rules, laws,
or
regulations governing mortgage lending in the State.
The employment of a mortgage originator licensed under Subtitle 6
Mortgage Originator Law by a mortgage lender does not relieve the
mortgage lender of a responsibility for ensuring that their employees follow all rules,
regulations
and laws governing mortgage lending in Maryland.
Any Mortgage Loan Originator who willfully violates
Maryland regulation/law is
guilty of a felony and:
On conviction is subject to a fine not exceeding $25,000 plus full restitution to
aggrieved party or imprisonment not exceeding 10 years.
On
conviction is subject to a fine not exceeding $25,000 or imprisonment not exceeding
5 years or both.
On
conviction is subject to a fine not exceeding $50,000 or imprisonment not
exceeding 5 years or both.
On
conviction is subject to a fine not exceeding $50,000 or imprisonment not
exceeding 10 years or both.
Any mortgage loan originator who willfully violates any provision, rule or regulation
of mortgage lending law in Maryland is guilty of a felony and, on conviction,
is subject to a fine not exceeding $25,000 or imprisonment not
exceeding 5 years or both.
In cases where lenders are allowed by law to collect a delinquent charge,
the
borrower must, among other things, have been delinquent for a least:
30
calendar days
28
business days
15
business days
15
calendar days
If a loan contract provides for a delinquent (or late charge),
this may be collected and will not constitute interest.
A delinquent charge of the greater of $2 or 5 percent of the
total amount of any delinquent or late periodic installment of
principal and interest may be levied if 1) the delinquency
continued for at least 15 calendar days; and
2) a delinquent or late charge has not already been charged
for the same delinquency.
Under Title 12, Subtitle 1 (§ 12-103) of Maryland Commercial Law,
when a loan is secured by a certificate of deposit held by the borrower,
a lender may charge interest in excess of the rate payable on the
certificate of deposit. However, the rate set by the lender
cannot exceed the rate payable on the certificate by
more than:
1.5
percentage points
1
percentage point
0.5
percentage point
2
percentage points
Under Title 12, Subtitle 1 (§ 12-103) of Maryland Commercial Law,
when a loan is secured by the pledge of collateral which is a
certificate of deposit held by the borrower, the lender may charge interest
at a rate not to exceed 2 percent in excess of the
rate of interest payable on the certificate of deposit.
A lending institution which lends money secured by a first mortgage
on any interest in residential real property and creates an
escrow account in connection with that loan
pays interest to the borrower on the funds in the escrow account:
Every
6 months
Every
month
Every
12 months
Every
week
A lending institution which lends money secured by a first mortgage
or first deed of trust on any interest in residential real property
and creates or is the assignee of an escrow account in connection
with that loan will pay interest to the borrower on the funds in the
escrow account at the greater of: (i) a rate of 3 percent per annum simple interest;
or (ii) the rate of interest regularly paid by the lending institution
on regular passbook savings accounts.
Interest on these funds will be (i) computed on the average monthly balance
in the escrow account;
and (ii) paid annually to the borrower by crediting the escrow account
with the amount of interest due.
In addition, the lending institution will annually provide the
borrower with a statement of the escrow balance.
A lender who receives scheduled monthly periodic
payments on more than five loans secured by an interest in real property
must provide the borrower, at given intervals,
a written statement informing the borrower of the following except
for:
The
payments received to cover insurance policies
The
payments received towards reducing the principal
The
principal balance which remains to be paid
The
payments received towards the interest due
Under Title 12, Subtitle 1 (§ 12-106) of Maryland Commercial Law,
at least annually and, on request of the borrower,
at any other reasonable time or interval, a lender who
receives scheduled monthly periodic payments
on more than five loans secured by an interest in real property
will furnish to the borrower a written statement informing
the borrower of the amount of:
1) the payments credited to reducing the principal;
2) the payments credited to interest as defined in this subtitle;
and 3) the remaining unpaid principal balance.
In the case of a commercial loan not secured by residential real property,
lenders may charge interest at any rate under
Title 12, Subtitle 1 (§ 12-103) of Maryland Commercial Law
provided the loan is in excess of:
$15,000
$25,000
$75,000
$55,000
Under Title 12, Subtitle 1 (§ 12-103) of Maryland Commercial Law,
lenders may charge interest at any rate if a loan is:
1) a loan made to a corporation;
2) a commercial loan in excess of $15,000
not secured by residential real property;
or 3) a commercial loan in excess of $75,000 secured by residential real property.
Commercial loans to individuals secured by residential
real property must
comply with the provisions of § 12-407.1.
Under the Equal Credit Opportunity Act, when a
creditor fails to comply with any requirements,
an aggrieved applicant may institute a civil action for preventive relief.
This could include the following except for:
An
application for a permanent injunction
An
application for a restraining order
An
application for a cease and desist order
An
application for a temporary injunction
Under the Equal Credit Opportunity Act, when a creditor fails to comply
with any requirements, an aggrieved applicant may institute
a civil action for preventive relief, including an application
for a permanent or temporary injunction, restraining order, or other action.
However, an applicant may not request a cease and
desist order.
When an applicant is otherwise credit worthy and
is not applying for a joint account, a creditor may
request the credit rating of an applicant's spouse in the
following circumstances except when the:
Applicant
does not have a prior credit history.
Applicant
designates their spouse as an authorized purchaser
Credit
rating of the spouse is more credit worthy than that of the applicant.
Applicant
lists credit references in the name of their spouse
A creditor may not request for or consider the credit rating of an
applicant's spouse where the applicant is otherwise credit worthy
and is not applying for a joint account unless
1) the applicant lists credit references in the name of spouse or former spouse
or 2) has no individual prior credit history
or 3) the creditor permits the applicant to designate the applicant's spouse
as an authorized purchaser on the
account.
Any creditor who fails to comply with any requirement imposed under the
Equal Opportunity Act may be liable for punitive damages
in the case of a class action. However, the total recovery
in such action will not exceed the lesser
of:
$100,000
or 5 percent of the net worth of the creditor
$100,000
or 1 percent of the net worth of the creditor.
$10,000
or 1 percent of the net worth of the creditor
$50,000
or 0.5 percent of the net worth of the creditor
Any creditor who fails to comply with any requirement imposed
under this subtitle may be liable for punitive damages in the case of a
class action in such amount as the court may allow, except that as to each member
of the class no minimum recovery will be applicable,
and the total recovery in such action will not exceed the lesser of $100,000
or 1 percent of the net worth of the creditor.
In determining the amount of award in any class action,
the court will consider, among other relevant factors,
the amount of any actual damages awarded,
the frequency and persistence of failures of compliance by the creditor,
the resources of the creditor,
the number of persons adversely affected, a
nd the extent to which the
creditor's failure of compliance was intentional.
With
respect to any aspect of a credit transaction, a creditor may legally refuse
to:
Consider the credit rating of an applicant's spouse if an applicant is unable to
provide
a personal credit history
Recognize
the legal name of a married person
Consider
child support as a valid source of income if its amount, length of time
received and regularity of receipt cannot be verified
Consider
both applicants' income when both parties of a marriage apply for a joint
account
With respect to any aspect of a credit transaction, a creditor is not allowed to:
1) refuse to consider both applicants' income when both parties of a
marriage party apply for a joint account;
2) refuse to consider alimony or child support awarded by a court
and received by the applicant as a valid source of income,
where that source can be verified as to its amount,
length of time received, and regularity of receipt;
3) refuse to extend credit to any person solely because of marital status
or change in marital status;
4) refuse to issue separate accounts to married persons where
each would be credit worthy if unmarried;
5) request the credit rating of an applicant's spouse where
the applicant is otherwise credit worthy and is not applying for a
joint account unless the applicant lists credit references
in the name of spouse or former spouse or has no individual prior credit history
or the creditor permits the applicant to designate the applicant's spouse
as an authorized purchaser .
If, following a hearing, the Commissioner finds that a
creditor has engaged in any prohibited practice,
the creditor will be ordered to cease and desist for that practice.
Such order will become final in the following circumstances except:
After
the court has affirmed the order, if an appeal is filed
After
the court has dismissed the appeal, if an appeal is filed
After the expiration of the time allowed by the Administrative Procedure Act, even if an appeal if filed
After the expiration of the time allowed by the Administrative Procedures Act, if no appeal is filed
If, after a hearing, the Commissioner finds that the creditor has
engaged or is engaging in any act or practice prohibited by this subtitle,
the Commissioner will order the creditor to cease and desist
from the act or practice as per the Administrative Procedures Act.
If no appeal is filed, the order will become final after
expiration of the time allowed by the Administrative Procedures Act
for appeals from the Commissioner's orders.
If an appeal is filed, the order will become final after the
final decision of the court affirming the order or dismissing the appeal.
When the Commissioner gives written notice of a complaint
to a credit grantor, the credit grantor
must be given at least:
5
days' notice prior to the hearing
7
days' notice prior to the hearing
10
days' notice prior to the hearing
3
days' notice prior to the hearing
The Commissioner will give to the credit grantor against whom a
complaint is filed written notice of the complaint and the time and place of any hearing.
The notice will be in writing and must be sent by certified mail,
return receipt requested, to the credit grantor's principal
place of business at least 10 days
prior to the date of the hearing.
Under Title 14, Subtitle 17 of Maryland Commercial Law,
following the receipt by the lender or credit grantor of a request,
the applicant will have the right to
receive a statement of reasons within:
Three
days
Fifteen
days
Thirty
days
Ten
days
The written statement required by § 14-1702 of this subtitle shall disclose to the applicant
(1) the applicant's right to a statement of reasons within 30 days after receipt
by the lender or credit grantor of a request made within
60 days after notification, made under § 14-1702(a) of this subtitle;
(2) the identity of the person or office from which the statement
of reasons may be obtained;
and (3) the right of the applicant to have the statement of reasons confirmed
in writing on written request.
A person found to have counterfeited letters of credit would be
guilty of a
felony and, on conviction, would be subject to:
Imprisonment
for up to 10 years or a fine not exceeding $100,000 or both
Imprisonment
for up to 10 years or a fine not exceeding $10,000 or both
Imprisonment
for up to 5 years or a fine not exceeding $10,000 or both
Imprisonment
for up to 10 years or a fine not exceeding $ 1,000 or both.
A person found to have counterfeited letters of credit, bonds, checks, deeds, drafts,
endorsements or assignments of a bond, drafts, checks, or promissory notes,
entries in account books or ledgers, negotiable instruments, powers of attorney,
promissory notes, releases or discharges for money or property, titles to motor vehicles,
waivers or releases of mechanics' lien or wills or codicils would be guilty of a felony
and on conviction would be subject to imprisonment not exceeding
10 years or a fine not exceeding $ 1,000 or both.
Following receipt of a completed application for credit,
a lender must notify the
applicant of the action taken on the application within:
7
days
21
days
30
daysYou should have checked this.
15
days
Following
receipt of a completed application for credit, a lender must notify the
applicant of the action taken on the application within 30 days.
The
practice by which payments on a loan are allocated between the outstanding
principal balance and interest and where payments are applied first to the
accumulated interest and any remainder is subtracted from the outstanding
principal balance is known as the:
Interest
and principal method
US
rule method
Principal
and interest method
Actuarial
method
The
actuarial method is the method of allocating payments made on a loan between
the outstanding principal balance of the loan and interest, by which a payment
is applied first to the accumulated interest, and any remainder is subtracted
from the outstanding principal balance of the loan.
f a fee
is to be paid from loan proceeds, the lender must comply with:
Disclosure
requirements of the law by advising borrower of the fee at settlement.
Disclosure
requirements of the law by advising borrower in writing of the fee at time of
interest rate lock.
Disclosure
requirements of the law by advising borrower in writing, of borrower's right to
refund if he or she exercises right of rescission.
Disclosure
requirements of the law by advising borrower in writing of the fee at time of
mortgage commitment.
If the Finder's Fee is
to be paid from the loan proceeds, the lender must comply with disclosure
requirements of the law by advising the borrower in writing of the borrower's
right to a refund if they exercise their right of rescission.
The
State of Maryland dictates that the separate Finders Fee Disclosure be signed
by the broker and delivered to the applicant within:
Ten
business days of application date
Ten
calendar days of application date
Three
business days of application date
Three
calendar days of application date
Broker's must provide
a dated and broker-signed copy of the Finder's Fee Agreement to the borrower
within 10 business days after the date the loan application is completed.
The Maryland Finders Fee Law was legislated to
protect consumers by:
Adding
additional mandated disclosures to the application package that the applicant
is required to sign.
Monitoring and eliminating repetitive and excessive fees;
and by removing financial incentive for mortgage brokers
engaged in loan flipping.
Requiring
brokers to disclose the fee to the consumer more than once to ensure the
consumer understands.`
Requiring
brokers to register and lock borrower interest rates with Lenders immediately
upon execution of the rate lock disclosure.
Maryland's Finder's
Fee Law reduces abusive loan flipping and excessive fees charged by brokers to
consumers.
Terms of the proposed Finder's Fee agreement must
be disclosed to the borrower:
Before the mortgage broker begins work to
secure a loan or advance of money on the
borrower's behalf.
At time of application or within three business
days of receipt of application.
Seventy-two
hours prior to mortgage settlement.
Before
the mortgage broker locks the interest rate with a lender.
The Finder's Fee agreement will be separate from any other disclosure.
The terms of the proposed agreement must
be disclosed to the borrower before the mortgage broker begins work on the loan.
The agreement shall specify the amount of the fee
and must contain a representation that the
mortgage broker is acting as a broker
and not
as a mortgage lender in the transaction.
Brokers are restricted from specific relationships
with the lenders in which they place loans.
Subject to this restriction,
which of the following statements is not
true?
A
mortgage broker may not be a director, officer, or employee of any lender where
he places a loan
A mortgage broker may not charge a finder's fee in any transaction in which the mortgage broker or an owner,
part owner, partner, director, officer, or employee
of the mortgage broker is a principal in a related firm.
A mortgage broker may not be a partner
(silent or otherwise) of any lender where
he places a loan.
A mortgage broker may not charge a loan origination fee
in any transaction in which the mortgage broker or an owner,
part owner, partner, director, officer,
or employee of the mortgage broker
serves any similar position at the lender.
A mortgage broker may not charge a finder's fee
in any transaction in which the mortgage broker
or an owner, part owner, partner, director, officer,
or employee of the mortgage broker is the lender or an owner,
part owner, partner, director, officer or
employee of the lender.
A
finder's fee under Maryland State law is defined as:
A
fee paid to anyone that "finds" or recovers something.
Any
compensation or commission directly or indirectly imposed by a broker.
Any
fee paid directly to the borrower for the purpose of securing a loan from a
Lender.
Any
compensation or commission directly or indirectly imposed by a broker and paid
by or on behalf of the borrower for the broker's services.
A
Finder's Fee means any compensation or commission directly or indirectly
imposed by a broker and paid by or on behalf of the borrower for the broker's
services in procuring, arranging, or otherwise assisting a borrower in
obtaining a loan or advance of money.
Maryland's Finders Fee Law limits a mortgage broker's
finder's fee on subsequent loans on the same property
in a twenty-four month period to:
Six
percent of the amount by which the subsequent loan exceeds the initial loan.
Eight
percent of the total loan amount.
Six
percent of the total loan amount.
Eight
percent of the amount by which the subsequent loan exceeds the initial loan.
Maryland's Finder's Fee Law limits a mortgage broker's
finder's fee to eight percent of the total loan amount brokered,
and limits the fee on subsequent loans on the
same property in a twenty-four month period to
eight percent of the amount by which the subsequent
loan exceeds the initial loan.
The State of Maryland dictates that the separate
Finders Fee Disclosure be signed by the broker and
delivered to the applicant within:
Three
calendar days of application date
Ten
calendar days of application date
Three
business days of application date
Ten
business days of application date
Broker's must provide a dated and broker-signed copy of the Finder's Fee Agreement to the borrower
within 10 business days after the date the
loan application is
completed.
Borrowers
are entitled to a refund of any finders fee paid to mortgage broker if:
The
loan is not properly disclosed or re-disclosed under RESPA and/or Maryland
Mortgage Law.
Loan transaction is not made to borrower or
borrower exercised right to rescind the loan
transaction under the Truth-in-Lending Act of
similar state and federal
laws..
The
borrower requests a transfer of all loan information and documentation to a
different broker prior to approval.
The
borrower withdraws the mortgage application prior to settlement.
Borrowers are entitled to a refund of any finder's fee paid to a mortgage broker if:
(1) the loan transaction is not made to the borrower;
or (2) the Borrower exercised their right to rescind the
loan transaction under the Truth-in-Lending Act
of
similar state and federal laws.
A
finders fee may not be charged without:
A
separate written agreement between the broker and the lender.
A
separate written agreement between the broker and the borrower.
A
separate written agreement between the broker, the lender, and the borrower.
A
separate written agreement between the lender and the borrower.
A Finder's Fee may not be charged without a
separate written agreement between the broker
and the borrower.
This disclosure will be separate from any other disclosure.
The terms of the proposed agreement
must be disclosed to the borrower
before the mortgage broker begins work on the loan.
The agreement shall specify the amount of the fee
and must contain a representation that the
mortgage broker is acting as a broker
and not as a mortgage lender in the
transaction.
Any
lender, his officer or employee and any other person who willfully violates
state and federal law is guilty of a misdemeanor and on conviction is:
Subject
to criminal penalties and imprisonment up to five years.
Subject
to a fine not exceeding $1,000 or imprisonment not exceeding one year or both.
Subject
to a fine not exceeding $1,000 per violation.
Subject
to a fine not exceeding $5,000 or imprisonment not exceeding one year or both.
A person who violates any State or Federal law in
the state of Maryland is guilty of a misdemeanor
and on conviction is subject to imprisonment
not exceeding one year or a fine not exceeding
$1,000 or both.
When calculating a refund following the prepayment
of a loan, the credit grantor, at its option,
may round the annual percentage rate
of the unearned portion of the
precomputed interest charge to the nearest:
0.25
percent.
0.20
percent
0.10
percent
0.15
percent
When calculating a refund following the
prepayment of a loan, the credit grantor,
at its option, may round the annual percentage rate
of the unearned portion of the precomputed
interest charge to the nearest 1/4 (0.25) of 1 percent.
Exempted institutions employing
Registered Mortgage Originators are:
Relieved
of responsibility required by state rules, laws, or regulations governing
mortgage lending in the State; but not relieved from Federal regulation and
statutes.
Compliant
to federal and state mortgage rules, laws, or regulations and receive
exemptions from certain penalties established by the Commissioner's Office.
Not relieved of any responsibility required by
federal or state rules, laws,
or
regulations governing mortgage lending in the State.
Relieved
of any responsibility required by federal or state rules, laws, or regulations
governing mortgage lending in the State.
The employment of a mortgage originator licensed
under Subtitle 6 Mortgage Originator Law
by a mortgage lender does not relieve the
mortgage lender of a responsibility for ensuring
that their employees follow all rules,
regulations
and laws governing mortgage lending in Maryland.
The Maryland Finders Fee Law was legislated
to protect consumers by:
Requiring brokers to register and lock borrower
interest rates with Lenders immediately upon
execution of the rate lock disclosure.
Adding
additional mandated disclosures to the application package that the applicant
is required to sign.
Requiring brokers to disclose the fee to the consumer
more than once to ensure the
consumer understands.`
Monitoring and eliminating repetitive and excessive fees;
and by removing financial
incentive for mortgage brokers engaged in loan flipping.
Maryland's Finder's Fee Law reduces
abusive loan flipping and excessive fees
charged by
brokers to consumers.
When an applicant is otherwise credit worthy
and is not applying for a joint account,
a creditor may request the credit rating of an
applicant's spouse in the following circumstances
except when the:
Applicant
designates their spouse as an authorized purchaser
Applicant
does not have a prior credit history
Applicant
lists credit references in the name of their spouse
Credit
rating of the spouse is more credit worthy than that of the applicant
A creditor may not request for or consider the
credit rating of an applicant's spouse where the applicant is otherwise credit worthy and is not applying for a
joint account unless
1) the applicant lists credit references in the name of spouse or former spouse
or 2) has no individual prior credit history
or 3) the creditor permits the applicant to designate
the applicant's spouse as an
authorized purchaser on the account.
When the Commissioner investigates complaints
brought by parties aggrieved by the licensee,
the licensee will:
Pay to the Commissioner an upfront fee of $2500
plus a per-diem fee set by the
Commissioner for each of the Commissioner's employees engaged in the
investigation.
Pay a flat fee of $5,000 to the Commissioner to
cover costs of the state's
investigation and examination.
Pay to the Commissioner a per-day fee set by the
Commissioner for each of the Commissioner's
employees engaged in the investigation.
Pay
to the Commissioner full reimbursement for State employees engaged in the
investigation
Any person aggrieved by the conduct of
a licensee in connection with a mortgage loan
may file a written compliant with the Commissioner who shall investigate the compliant.
A licensee shall pay to the Commissioner
a per-day fee set by the
Commissioner for each of the Commissioner's employees engaged in any
examination or investigation conducted.
If, following a hearing, the Commissioner
finds that a creditor has engaged in any prohibited
practice, the creditor will be ordered to cease and desist
for that practice.
Such order will become final in the
following circumstances except:
After the expiration of the time allowed by
the Administrative Procedures Act, if no
appeal is filed
After
the court has dismissed the appeal, if an appeal is filed
After
the court has affirmed the order, if an appeal is filed
After the expiration of the time allowed by the
Administrative Procedure Act, even if
an appeal if filed
If, after a hearing, the Commissioner finds
that the creditor has engaged or is engaging in
any act or practice prohibited by this subtitle,
the Commissioner will order the creditor to
cease and desist from the act or practice as per
the Administrative Procedures Act.
If no appeal is filed, the order will become final
after expiration of the time allowed by the Administrative Procedures Act for appeals from the Commissioner's orders.
If an appeal is filed,
the order
will become final after the final decision of the court affirming the order or
dismissing the appeal.
A
finder's fee under Maryland State law is defined as:
Any compensation or commission directly
or indirectly imposed by a broker and paid by or on
behalf of the borrower for the broker's services.
Any
compensation or commission directly or indirectly imposed by a broker.
A
fee paid to anyone that "finds" or recovers something.
Any
fee paid directly to the borrower for the purpose of securing a loan from a
Lender.
A Finder's Fee means any compensation or
commission directly or indirectly imposed by a
broker and paid by or on behalf of the borrower for the broker's
services in procuring, arranging, or otherwise assisting
a borrower in
obtaining a loan or advance of money.
A person who takes a mortgage loan application
or offers or negotiates terms of a mortgage loan
for compensation or gain is:
A
mortgage loan originator.
A
mortgage loan correspondent.
A
table-funder.
Any
employee of a financial institution.
A mortgage loan originator is an individual
who for compensation or gain, or in the expectation of compensation or gain, takes a loan application
or offers or negotiates terms of a mortgage loan.
A mortgage loan correspondent originates
and closes loans in their own name using funds provided by wholesale table-funders.
A wholesale table-funder provides funding for
closing mortgage through correspondents
and obtains title through assignments.
Once
the mortgage license is issued, business licensees and originators are required
to:
Post the license in the President's office and
make available upon request.
Post a list of all approved mortgage originators
under the license beside the
license.
Display the mortgage license with it's
"unique identifier" in conspicuous places that
consumers may view.
File the license and have available for review
by the Department of Financial Regulation
when they conduct the on-site examination.
Every mortgage licensee shall display the license
with their unique identifier assigned by NMLSR
in a conspicuous place; include their
unique identifier in all mortgage loan documents,
advertisements and any form required by regulation;
and transact business with exact name as issued
on the license.
With respect to any aspect of a credit transaction,
a creditor may legally refuse
to:
Recognize
the legal name of a married person
Consider child support as a valid source of income
if its amount, length of time received and
regularity of receipt cannot be verified
Consider the credit rating of an applicant's
spouse if an applicant is unable to provide a
personal credit history
Consider both applicants' income when
both parties of a marriage apply for a joint
account
With respect to any aspect of a credit transaction,
a creditor is not allowed to:
1) refuse to consider both applicants' income
when both parties of a marriage party apply for a
joint account;
2) refuse to consider alimony or child support
awarded by a court and received by the applicant
as a valid source of income,
where that source can be verified as to its amount,
length of time received, and regularity of receipt;
3) refuse to extend credit to any person solely
because of marital status or change in marital status;
4) refuse to issue separate accounts to
married persons where each would be
credit worthy if unmarried;
5) request the credit rating of an
applicant's spouse where the applicant
is otherwise credit worthy and is
not applying for a joint account
unless the applicant lists credit references
in the name of spouse or former spouse
or has no individual prior credit history
or the creditor permits the applicant to
designate the applicant's spouse as an authorized purchaser .
Adverse
action may refer to any of the following except:
The
imposition of a late-payment chargeYou correctly checked this.
A
change in the terms of an existing credit arrangement
The
denial of credit
The
revocation of credit
The
expression 'adverse action' may refer to either 1) a denial or revocation of
credit or 2) a change in the terms of an existing credit arrangement or 3) a
refusal to grant credit in substantially the amount or on substantially the
terms requested. A late-payment charge is not considered an adverse action.
Question 14
Brokers
are restricted from specific relationships with the lenders in which they place
loans. Subject to this restriction, which of the following statements is not
true?
A
mortgage broker may not be a partner (silent or otherwise) of any lender where
he places a loan.
A
mortgage broker may not charge a loan origination fee in any transaction in
which the mortgage broker or an owner, part owner, partner, director, officer,
or employee of the mortgage broker serves any similar position at the lender.
A
mortgage broker may not be a director, officer, or employee of any lender where
he places a loan.
A
mortgage broker may not charge a finder's fee in any transaction in which the
mortgage broker or an owner, part owner, partner, director, officer, or
employee of the mortgage broker is a principal in a related firm.You correctly checked this.
A
mortgage broker may not charge a finder's fee in any transaction in which the
mortgage broker or an owner, part owner, partner, director, officer, or
employee of the mortgage broker is the lender or an owner, part owner, partner,
director, officer or employee of the lender.
Loan
Origination fees are permitted in Maryland subject to certain restrictions
which include:
$500
or 10% of net proceeds of a commercial loan of $75,000 or less or $250 or 10%
of net proceeds of any other loan made.You should have checked this.
$500
or 10% of net proceeds of a residential mortgage loan of $75,000 or less or
$250 or 10% of net proceeds of any other loan made.
$500
or 10% of net proceeds of a commercial loan of $75,000 or less or $250 or 10%
of net proceeds of any other loan made plus commission, finder's fees, points.
$1,000
or 10% of net proceeds of a commercial loan of $75,000 or less or $500 of 10%
of net proceeds of any other loan made.
A
lender may collect a loan origination fee for making a loan subject to the
following restrictions: (1) the aggregate amount of the loan origination fee
imposed by a lender - when combined with any finder's fee imposed by a mortgage
broker may not exceed: (a) $500 or 10% of the net proceeds of a commercial loan
of $75,000 or less; or (b) $250 or 10% of the net proceeds of any other loan;
(2) a lender may not collect from the borrower any other commission, finder's
fee or points for obtaining, procuring or placing a loan; (3) Origination fees
are not permitted on secondary market purchase loans compliant to Federal Agency
investors including but not limited to GNMA, FNMA, FHLMC, the Federal Reserve
Bank and the Farmers Home Administration.
With
respect to any aspect of a credit transaction, a creditor may legally refuse
to:
Issue
separate accounts to a married couple where each would be credit worthy if
unmarried
Extend
credit to any person solely because of marital status or change in marital
status
Evaluate
a credit application if an applicant refuses to divulge information about their
birth-control practices
Consider
the credit rating of an applicant's spouse if the applicant chooses to
designate his spouse as an authorized purchaser on the accountYou correctly checked this.
With
respect to any aspect of a credit transaction, a creditor is not allowed to
request the credit rating of an applicant's spouse where the applicant is
otherwise credit worthy and is not applying for a joint account unless the
applicant lists credit references in the name of spouse or former spouse or has
no individual prior credit history or the creditor permits the applicant to
designate the applicant's spouse as an authorized purchaser on the account.
This means that the creditor is not legally obliged to allow an applicant to
name a spouse as an authorized purchaser of an account. The creditor may
therefore legally refuse to consider the credit rating of an applicant's
spouse.
Question 17
Under
Maryland Mortgage Lender Law, subsidiaries and affiliates of financial
institutions must:
Do
nothing, they are exempt from licensing in Maryland.
Register
with NMLS only.
License
in Maryland when they maintain the principal office in Maryland.You should have checked this.
Meet
special minimum net worth and insurance requirements as a condition of
licensing.
The
Maryland Mortgage Lender law requires subsidiaries and affiliates of (1) any bank,
trust company, savings bank, savings and loan association, or credit union
incorporated of chartered under the laws of Maryland or the United States that
maintains its principal office in Maryland; (2) any out-of-state bank; (3) any
institution incorporated under federal law as a savings association or savings
bank that does not maintain its principal office in Maryland but has a branch
that accepts deposits in Maryland to file with the Commissioner, prior to
making mortgage loans, information sufficient to identity the entity.
The
practice by which payments on a loan are allocated between the outstanding
principal balance and interest and where payments are applied first to the
accumulated interest and any remainder is subtracted from the outstanding
principal balance is known as the:
Interest
and principal method
Principal
and interest method
US
rule method
Actuarial
methodYou correctly checked this.
The
actuarial method is the method of allocating payments made on a loan between
the outstanding principal balance of the loan and interest, by which a payment
is applied first to the accumulated interest, and any remainder is subtracted
from the outstanding principal balance of the loan
A
lending institution which lends money secured by a first mortgage on any
interest in residential real property and creates an escrow account in
connection with that loan will pay interest to the borrower on the funds in the
escrow account:
Every
12 monthsYou correctly checked this.
Every
week
Every
month
Every
6 months
A
lending institution which lends money secured by a first mortgage or first deed
of trust on any interest in residential real property and creates or is the
assignee of an escrow account in connection with that loan will pay interest to
the borrower on the funds in the escrow account at the greater of: (i) a rate
of 3 percent per annum simple interest; or (ii) the rate of interest regularly
paid by the lending institution on regular passbook savings accounts. Interest
on these funds will be (i) computed on the average monthly balance in the
escrow account; and (ii) paid annually to the borrower by crediting the escrow
account with the amount of interest due. In addition, the lending institution
will annually provide the borrower with a statement of the escrow balance.
When
investigating a complaint for violation of any provisions of the Maryland
Commercial Law Code, the Commissioner will investigate the complaint and may
hold a hearing on it in accordance with the:
Administrative
Procedures Code
Administrative
Procedures ActYou correctly checked this.
Administrative
Provisions Code
Administrative
Provisions Act
When
investigating a complaint for violation of any provisions of the Maryland
Commercial Law Code, the Commissioner will investigate the complaint and may
hold a hearing on it in accordance with the Administrative Procedures Act. The
Commissioner will give to the creditor complained against at least 10 days'
written notice of the complaint and the time and place of any hearing. The
notice will be in writing and sent by registered or certified mail to the
creditor's principal place of business
Following
receipt of a completed application for credit, a lender must notify the
applicant of the action taken on the application within:
30
daysYou correctly checked this.
21
days
7
days
15
days
Following
receipt of a completed application for credit, a lender must notify the
applicant of the action taken on the application within 30 days.
Lender
inspection fees are permitted under the following circumstances:
To
establish existence of real property for documentation when using local tax
base to establish value.
To
determine completion of new home construction and to verify completion of
repairs required by lender as a condition of approval.You correctly checked this.
To
verify that a house is actually located on the property.
To
support real estate appraiser's independent estimate of value.
Lenders
are not allowed to impose inspection fees except when needed to determine
completion of: (1) construction of a new home; or (2) repairs, alterations or
other work required by the lender.
Under
Title 12, Subtitle 10 of Maryland Commercial Law, when a charge is made to a
borrower for premiums for insuring them under an insurance policy, then, in the
event of prepayment in full, the credit grantor will refund or credit to the
borrower any unearned premiums paid by the borrower provided that the refund or
credit is in excess of:
$5You correctly checked this.
$1
$10
$15
If a
charge is made to a consumer borrower for premiums for insuring the borrower
under an insurance policy pursuant to Title 12, Subtitle 10 of Maryland
Commercial Law, then, in the event of prepayment in full, the credit grantor
will refund or credit to the borrower any unearned premiums paid by the
borrower, provided that no refund or credit of less than $5 will be required.
Under
Title 12, Subtitle 1 (§ 12-103) of Maryland Commercial Law, when a loan is
secured by a certificate of deposit held by the borrower, a lender may charge
interest in excess of the rate payable on the certificate of deposit. However,
the rate set by the lender cannot exceed the rate payable on the certificate by
more than:
0.5
percentage point
1
percentage point
2
percentage pointsYou correctly checked this.
1.5
percentage points
Under
Title 12, Subtitle 1 (§ 12-103) of Maryland Commercial Law, when a loan is
secured by the pledge of collateral which is a certificate of deposit held by
the borrower, the lender may charge interest at a rate not to exceed 2 percent
in excess of the rate of interest payable on the certificate of deposit.
Upon
issuance of a "Cease and Desist Order" by the Commissioner, the
licensee may be required to:
Terminate
employment of the employee who committed the violation, thereby relieving the
lender of liability.
To
cease and desist from the violation and any further similar violations.
Terminate
employment of the employee who committed the violation thereby eliminating the
source of the violation.
To
cease and desist from violation and take affirmative action to correct the
violation including the restitution of money or property to any person
aggrieved by the violation.You correctly checked this.
Upon
issuance of a "Cease and Desist Order" by the Commissioner, the
licensee may be required to cease and desist from the violation and any further
similar violations and take affirmative action to correct the violation
including the restitution of money or property to any person aggrieved by the
violation.
Under
the Equal Credit Opportunity Act, when a creditor fails to comply with any
requirements, an aggrieved applicant may institute a civil action for
preventive relief. This could include the following except for:
An
application for a permanent injunction
An
application for a cease and desist orderYou should have checked this.
An
application for a temporary injunction
An
application for a restraining order
Under
the Equal Credit Opportunity Act, when a creditor fails to comply with any
requirements, an aggrieved applicant may institute a civil action for
preventive relief, including an application for a permanent or temporary
injunction, restraining order, or other action. However, an applicant may not
request a cease and desist order.
Score: 0%
Question 27
Any
unlicensed person who is not exempt from licensing who makes or assists a
borrower in obtaining a mortgage loan in violation of Maryland mortgage law may
collect:
The
principal amount of the loan and any interest, costs, finder's fees, broker
fees, or other charges with respect to the loan.
The
principal amount of the loan only and must reimburse the borrower all fees and
charges collected by the unlicensed person plus rebate 15% of interest charges
previously collected.
Any
interest, costs, broker fees, or other charges with respect to the loan.
The
principal amount of the loan and may not collect any interest, costs, finder's
fees, broker fees, or other charges with respect to the loan.You correctly checked this.
Any
unlicensed person who is not exempt from licensing and who assists a borrower
in obtaining a mortgage loan may collect only the principal amount of the loan
and may not collect any interest, costs, finder's fees, brokers fees or other
charges with respect to the loan.
Question 28
Under
Title 14, Subtitle 17 of Maryland Commercial Law, following the receipt by the
lender or credit grantor of a request, the applicant will have the right to
receive a statement of reasons within:
Thirty
daysYou correctly checked this.
Fifteen
days
Three
days
Ten
days
The
written statement required by § 14-1702 of this subtitle shall disclose to the
applicant (1) the applicant's right to a statement of reasons within 30 days
after receipt by the lender or credit grantor of a request made within 60 days
after notification, made under § 14-1702(a) of this subtitle; (2) the identity
of the person or office from which the statement of reasons may be obtained;
and (3) the right of the applicant to have the statement of reasons confirmed
in writing on written request.
Question 29
Lenders
may not require a particular attorney or title insurance company if:
Borrower
notifies lender of their choice within 7 days after application and lender
doesn't reject the choice.You correctly checked this.
Borrower
notifies lender of their choice 7 days prior to closing and lender doesn't
reject the choice.
Borrower
notifies lender of their choice within 15 days after application and lender
doesn't reject the choice.
Realtor
names the settlement agent in the purchase agreement.
A
lender may not require as a condition of settlement that a borrower employ a
particular attorney or title insurance company to perform a title search,
examination of title or closing if: (1) the borrower notifies the lender,
within 7 days after application for the loan, of the name and business address
of the borrower's choice of attorney or title insurance company; (2) the lender
doesn't reject the borrower's choice of attorney or title insurance company for
good cause within 7 days after the receipt of the attorney fee disclosure.
Lenders are not prohibited from requiring a borrower to pay for preparation of
loan closing documents, title insurance, review of documents prepared by the
borrower's attorney or attendance at settlement by the lender's attorney.
Question 30
Maryland's
Finders Fee Law limits a mortgage broker's finder's fee on subsequent loans on
the same property in a twenty-four month period to:
Six
percent of the amount by which the subsequent loan exceeds the initial loan.
Eight
percent of the total loan amount.
Six
percent of the total loan amount.
Eight
percent of the amount by which the subsequent loan exceeds the initial loan.You correctly checked this.
Maryland's
Finder's Fee Law limits a mortgage broker's finder's fee to eight percent of
the total loan amount brokered, and limits the fee on subsequent loans on the
same property in a twenty-four month period to eight percent of the amount by
which the subsequent loan exceeds the initial loan.
Question 31
On
conviction of a misappropriation or conversion penalty, licensees are subject to:
To
a fine not to exceed $100,000 or imprisonment not exceeding 25 years or both.
To
a fine not to exceed $100,000 or imprisonment not exceeding 15 years or both.You should have checked this.
To
a fine not exceeding $50,000 or imprisonment not exceeding 10 years or both.
To
a fine not exceeding $25,000 or imprisonment not exceeding 5 years or both.
Any
mortgage lender or employee or agent of a mortgage lender who willfully
misappropriates or intentionally and fraudulently converts borrower fund in
excess of $300 to their own use is guilty of a felony and, on conviction, is
subject to a fine not exceeding $100,000 or imprisonment not exceeding 15 years
or both.
In the
mortgage industry, a general definition of a finder's fee is:
An
amount of money given to the person who brings sellers and lenders together.
A
fee paid to anyone that "finds" or recovers something.
An
amount of money, usually calculated as a percentage, given to the person who
brings buyers, sellers and lenders together.You correctly checked this.
An
amount of money, usually calculated as a pre-determined or arranged one-time
fee, given to the person who brings buyers, sellers and lenders together.
A
general definition of a finder's fee is any amount of money, usually calculated
as a percentage, that is given to the person who brings buyers, sellers and
lenders together.
Question 33
The
State of Maryland dictates that the separate Finders Fee Disclosure be signed
by the broker and delivered to the applicant within:
Three
calendar days of application date
Ten
calendar days of application date
Ten
business days of application dateYou correctly checked this.
Three
business days of application date
Broker's
must provide a dated and broker-signed copy of the Finder's Fee Agreement to
the borrower within 10 business days after the date the loan application is
completed.
Question 34
The
state of Maryland prohibits mortgage licensing for:
An
applicant who is a registered mortgage originator in another state.
An
applicant who has been pardoned for a conviction.
Any
federal crime for which the maximum punishment authorized by law exceeds
one-year of imprisonment.You correctly checked this.
An
applicant who complies to Maryland mortgage laws.
The
state of Maryland prohibits mortgage licensing if the applicant had any federal
crime for which the maximum punishment authorized by law exceeds one-year of
imprisonment.
Question 35
A
person who provides funding for closing mortgage loans through mortgage loan
correspondents and obtains title through assignments at settlement is :
Wholesale
Table-FunderYou should have checked this.
Mortgage
Broker
Mortgage
loan correspondent.
Mortgage
Lender
A
wholesale table-funder provides funding for closing mortgage through
correspondents and obtains title through assignments. A mortgage loan
correspondent originates and closes loans in their own name using funds
provided by wholesale table-funders. A mortgage broker means a person who (1)
for a fee or other valuable consideration assists a borrower in obtaining a
loan; and (2) is not named as a lender in the agreement, note, deed of trust or
other evidence of the indebtedness. A mortgage lender means any person who (1)
is a mortgage broker; (2) makes a loan to any person; or (3) engages in whole
or in part in the business of servicing mortgage loans for others or collect or
otherwise receives payments on mortgage loans directly from borrower for
distribution to any other person.
