Section 11-603.1 - Affiliated insurance producer-mortgage loan originator. - Maryland Statutes

§ 11-603.1. Affiliated insurance producer-mortgage loan originator.
 

(a)  "Affiliated insurance producer-mortgage loan originator" defined.- In this section, "affiliated insurance producer-mortgage loan originator" means an individual who: 

(1) Originates mortgage loans only on behalf of a single financial institution that is: 

(i) Described in § 11-502(b)(1) of this title; and 

(ii) Approved by the Commissioner under subsection (b) of this section; 

(2) Is a licensed insurance producer in good standing under § 10-103 of the Insurance Article; and 

(3) Holds an appointment as an insurance producer for an insurer that controls, is controlled by, or is under common control with: 

(i) The financial institution described in item (1) of this subsection; or 

(ii) A mortgage lender licensee that: 

1. Is approved by the Commissioner under subsection (c) of this section; and 

2. Originates loans only on behalf of the financial institution described in item (1) of this subsection under an exclusive contract with the financial institution. 

(b)  Criteria for approval of originator of single financial institution.- The Commissioner shall approve a financial institution described in subsection (a)(1) of this section based on the following criteria: 

(1) The financial institution is in good standing with its primary state or federal regulator; and 

(2) The financial institution is in material compliance with applicable state and federal law. 

(c)  Criteria for approval of originator of approved lender under exclusive contract.- The Commissioner shall approve a mortgage lender licensee described in subsection (a)(3)(ii) of this section based on the following criteria: 

(1) The mortgage lender licensee is in good standing with the Commissioner and any other regulator to which it is subject; and 

(2) The mortgage lender licensee is in material compliance with applicable state and federal law. 

(d)  Approval to be in writing.- Approval by the Commissioner of a financial institution under subsection (b) of this section and a mortgage lender licensee under subsection (c) of this section shall be in writing. 

(e)  Form.-  

(1) An application for a license under this section shall be in the form approved by the Commissioner. 

(2) The application shall require the identification of: 

(i) The financial institution described in subsection (a)(1) of this section; 

(ii) If applicable, the mortgage lender licensee described in subsection (a)(3)(ii) of this section; and 

(iii) The insurer with which the applicant holds an appointment. 

(3) An application for a license under this section shall be signed by an authorized representative of: 

(i) The financial institution identified in the application; or 

(ii) If a mortgage lender licensee is identified in the application, the mortgage lender licensee. 

(f)  Authority granted.- Notwithstanding §§ 11-602(a) and 11-603 of this subtitle, and subject to the provisions of this section, a license issued under this section authorizes the licensee to act as a mortgage loan originator. 

(g)  Compliance with licensure requirements.- An applicant for a license under this section and a licensee under this section shall comply with all other requirements for licensure as a mortgage loan originator under this subtitle. 

(h)  Limitation of activities to single financial institution.- A licensee under this section shall limit the licensee's activities to originating mortgage loans only on behalf of a single financial institution approved by the Commissioner under subsection (b) of this section. 

(i)  Duties of financial institution or mortgage lender.- The financial institution identified in a licensee's license application or, if a mortgage lender licensee is identified in a licensee's license application, the mortgage lender licensee shall: 

(1) Supervise the licensee, including providing direction through written instructions or electronic means and by periodically examining the licensee's books, records, and other aspects of the licensee's business; 

(2) Be held jointly and severally liable with the licensee for claims arising out of the licensee's mortgage loan origination activities; and 

(3) Meet, or cause the licensee to meet, the surety bond requirements under § 11-619(c) of this subtitle. 

(j)  Prohibited acts.- Except as provided in subsection (k) of this section, a licensee under this section may not: 

(1) Aid or assist a borrower to obtain a mortgage loan from a financial institution other than the financial institution identified in the licensee's license application; 

(2) Except for compensation based on the principal balance of a mortgage loan, be compensated by any person for mortgage loan origination activities on a basis that depends on the terms of the mortgage loan, including interest rate or fees; 

(3) Receive a finder's fee, as defined in § 12-801 of the Commercial Law Article; 

(4) Handle borrower or other third party funds in connection with the origination or closing of a mortgage loan; 

(5) Refer a borrower to any other licensee under Subtitle 5 of this title; or 

(6) Make or service a mortgage loan. 

(k)  Forwarding checks.- A licensee under this section may forward a check to the financial institution identified in the licensee's license application if the check is: 

(1) Made payable to the financial institution; 

(2) From an applicant for a mortgage loan; and 

(3) In connection with an application for a mortgage loan to cover costs for: 

(i) An appraisal; 

(ii) A credit report; or 

(iii) Processing the application. 

(l)  Continuation of power to originate mortgages while taking actions to participate in Nationwide Mortgage Licensing System and Registry.- An affiliated insurance producer-mortgage loan originator who holds a mortgage lender license under § 11-506(c) of this title on July 1, 2009, may continue to originate mortgages under a valid mortgage lender license until December 31, 2009, provided that the affiliated insurance producer-mortgage loan originator takes the actions necessary to participate in the Nationwide Mortgage Licensing System and Registry, as required by the Commissioner. 
 

[2009, ch. 4.]