2023 Maryland Statutes › Financial Institutions › Title 11 - Consumer Credit › Subtitle 6 - Mortgage Loan Originators › Section 11-603.1 - Affiliated Insurance Producer-Mortgage Loan Originator

(a)    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)    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)    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 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)    (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)    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)    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)    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)    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)    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)    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)    (1)    An individual may not act as an affiliated insurance producer–mortgage loan originator under a name or for an employer that is different from the name and employer that appear on the license unless the licensee:
(i)    Notifies the Commissioner, in the form and in accordance with the process that the Commissioner requires, in advance of a change in the licensee’s name or the licensee’s employer;
(ii)    Pays to the Commissioner a license amendment fee set by the Commissioner for each notice provided under item (i) of this paragraph; and
(iii)    In the case of a new employer, amends the sponsorship information on NMLS by submitting the amendment in the form required by the Commissioner to indicate that the licensee is an employee of the new employer.
(2)    If a licensee ceases to be employed by a financial institution approved by the Commissioner under subsection (b) of this section, the licensee shall notify the Commissioner within 10 business days, and the license shall be placed into nonactive status through NMLS.
(3)    During the time that a license is in nonactive status, it is a violation of this subtitle for the licensee to engage in any activity for which a license is required under this subtitle.
(4)    The license shall remain in nonactive status until the licensee:
(i)    Notifies the Commissioner, in the form and in accordance with the process that the Commissioner requires, that the licensee has obtained employment with a financial institution that is approved by the Commissioner under subsection (b) of this section; and
(ii)    Has complied with the requirements set forth in paragraph (1) of this subsection.
(m)    The Commissioner may issue a license under this subtitle to an individual who is not employed by a financial institution approved by the Commissioner under subsection (b) of this section, provided that the license is placed into and remains in nonactive status until the licensee:
(1)    Notifies the Commissioner, in the form and in accordance with the process that the Commissioner requires, that the licensee has obtained employment with a financial institution approved by the Commissioner under subsection (b) of this section; and
(2)    Has complied with the requirements set forth in subsection (l)(1) of this section.