2023 Maryland Statutes › Financial Institutions › Title 11 - Consumer Credit › Subtitle 5 - Maryland Mortgage Lender Law › Section 11-508.1 - Lender Net Worth Requirements

(a)    An applicant for a new license or for the renewal of a license shall satisfy the Commissioner that the applicant or licensee has, and at all times will maintain, a minimum tangible net worth computed according to generally accepted accounting principles or, with respect to an applicant or licensee described in item (1) of this subsection, any other recognized comprehensive basis of accounting approved by the Commissioner:
(1)    In the case of an applicant that applies to act as a mortgage broker or a licensee that acts as a mortgage broker, in the amount of $25,000;
(2)    In the case of an applicant that applies to act as a mortgage loan servicer that operates as an approved servicer for a government–sponsored enterprise (GSE) or a licensee that acts as a mortgage servicer and operates as an approved servicer for a GSE, in the largest amount required of the applicant or licensee by the standards of the GSE;
(3)    In the case of an applicant that applies to act as a mortgage servicer that does not operate as an approved servicer for a GSE or a licensee that acts as a mortgage servicer that does not operate as an approved servicer for a GSE:
(i)    $100,000, if the unpaid principal balance of the entire servicing portfolio is less than or equal to $50,000,000;
(ii)    $250,000, if the unpaid principal of the entire servicing portfolio is greater than $50,000,000 but less than or equal to $100,000,000;
(iii)    $500,000, if the unpaid principal balance of the entire servicing portfolio is greater than $100,000,000 but less than or equal to $250,000,000; or
(iv)    $1,000,000, if the unpaid principal balance of the entire servicing portfolio is greater than $250,000,000; and
(4)    In the case of an applicant that applies to lend money secured by a dwelling or residential real estate or a licensee that lends money secured by a dwelling or residential real estate, in the amount of:
(i)    $25,000, if the applicant or licensee, in the 12 months prior to the license application or the renewal application, lent in the aggregate not more than $1,000,000 secured by a dwelling or residential real estate;
(ii)    $50,000, if the applicant or licensee, in the 12 months prior to the license application or the renewal application, lent in the aggregate more than $1,000,000, but not more than $5,000,000 secured by a dwelling or residential real estate;
(iii)    $100,000, if the applicant or licensee, in the 12 months prior to the license application or the renewal application, lent in the aggregate more than $5,000,000, but not more than $10,000,000 secured by a dwelling or residential real estate; and
(iv)    $250,000, if the applicant or licensee, in the 12 months prior to the license application or the renewal application, lent in the aggregate more than $10,000,000 secured by a dwelling or residential real estate.
(b)    (1)    Subject to paragraphs (2), (3), and (4) of this subsection, the minimum net worth requirements under subsection (a) of this section may be satisfied by the applicant or licensee having:
(i)    Cash on deposit with a bank or depository institution;
(ii)    A working capital line of credit from a bank or depository institution;
(iii)    An irrevocable letter of credit from a bank or depository institution;
(iv)    Other assets; or
(v)    A combination of cash, a working capital line of credit, an irrevocable letter of credit, or other assets.
(2)    If cash is used toward satisfying the minimum net worth requirements under subsection (a) of this section, the applicant or licensee shall submit to the Commissioner a bank letter verifying:
(i)    The account balance;
(ii)    The type of account in which the funds are held; and
(iii)    That the funds are not encumbered or hypothecated in any way.
(3)    (i)    If a working capital line of credit is used toward satisfying the minimum net worth requirements under subsection (a) of this section, the applicant or licensee shall submit to the Commissioner a copy of the line of credit agreement and the promissory note, and, subject to subparagraphs (ii) and (iii) of this paragraph, a reservation of the working capital line of credit in favor of the Commissioner by the bank or depository institution.
(ii)    A working capital line of credit may not be used toward satisfying more than 75% of the minimum net worth requirements under subsection (a) of this section.
(iii)    A working capital line of credit may not be used toward satisfying the minimum net worth requirements under subsection (a)(2) and (3) of this section.
(4)    (i)    If an irrevocable letter of credit is used toward satisfying the minimum net worth requirements under subsection (a) of this section, the applicant or licensee shall submit to the Commissioner the original irrevocable letter of credit.
(ii)    An irrevocable letter of credit may not:
1.    Terminate prior to the expiration of a license; or
2.    Be modified or revoked without the prior written consent of the Commissioner.
(c)    A licensee shall provide to the Commissioner proof of satisfying minimum net worth requirements under subsection (a) of this section within 90 days after the last day of the licensee’s most recent fiscal year.