Code of Maryland Regulations › Title 09 - MARYLAND DEPARTMENT OF LABOR › Subtitle 03 - COMMISSIONER OF FINANCIAL REGULATION › Chapter 09.03.06 - Mortgage Lending › Section 09.03.06.02 - Definitions

Current through Register Vol. 51, No. 14, July 12, 2024
A. In this chapter,
				the following terms have the meanings indicated.
B. Terms Defined.
(1) "Advertisement" means a statement in any
				medium used or intended to induce any person to apply for a mortgage
				loan.
(2) "Annual percentage rate
				(APR)" has the meaning stated in 12 CFR Part 1026, as it may be amended from
				time to time.
(3) Applicant.
(a) "Applicant" means a borrower who has not
				received a commitment from a licensee to make the loan requested.
(b) "Applicant" does not include a person
				whose request for a mortgage loan has been denied.
(4) "Average prime offer rate" has the
				meaning stated in 12 CFR Part 1026, as it may be amended from time to
				time.
(5) "Borrower" has the
				meaning stated in Financial Institutions Article, §
										11-501,
				Annotated Code of Maryland.
(6)
				"Breach of the security of a system" has the meaning stated in Commercial Law
				Article, §
										14-3504, Annotated
				Code of Maryland.
(7) Broker.
(a) This section defines whether a person is
				acting as a broker or a lender in a particular transaction.
(b) For purposes of all Maryland laws and
				regulation applicable to mortgage lenders, a person is acting as a broker if:
(i) The person aids or assists a borrower in
				obtaining a mortgage loan for a fee or other valuable consideration;
				and
(ii) The creditor identified in
				the loan documents is a different person than the person described in
				§B(7)(b)(i) of this regulation.
(c) There is no broker in a transaction
				solely because the lender contracts with a third party for processing or
				underwriting services if:
(i) The person
				contracting to perform the processing or underwriting did not generate the loan
				application; and
(ii) The loan is
				closed in the name of the lender which did generate the loan
				application.
(8) "Commissioner" has the meaning stated in
				Financial Institutions Article, §
										1-101,
				Annotated Code of Maryland.
(9)
				"Commitment" has the meaning stated in Commercial Law Article, §
										12-125(a)(3),
				Annotated Code of Maryland.
(10)
				"Corporate governance" means the management structure of the licensee and the
				processes by which the business is managed, including the corporate controls,
				rules, policies, processes, and practices used to oversee and manage the
				institution.
(11) "Customer
				information" has the meaning stated in 16 CFR Part 314, as it may be amended
				from time to time.
(12) "Dwelling"
				has the meaning stated in Financial Institutions Article, §
										11-501,
				Annotated Code of Maryland.
(13)
				"Electronic record" has the meaning stated in Commercial Law Article, §
										21-101(h),
				Annotated Code of Maryland.
(14)
				"Escrow account" has the meaning stated in Commercial Law Article, §
										12-109(a)(3),
				Annotated Code of Maryland.
(15)
				"External audit" means the formal report prepared by an independent certified
				public accountant expressing an opinion on whether the financial statements are
				presented fairly, in all material aspects, in accordance with the applicable
				financial reporting framework, and is inclusive of an evaluation of the
				adequacy of a company's internal control structure.
(16) "Financing agreement" has the meaning
				stated in Commercial Law Article, §
										12-125(a)(4),
				Annotated Code of Maryland.
(17)
				"Fully indexed rate" has the meaning stated in 12 CFR Part 1026, as it may be
				amended from time to time.
(18)
				"Higher-priced mortgage loan" has the meaning stated in 12 CFR Part 1026, as it
				may amended from time to time
(19)
				"Information security program" has the meaning stated in
				16 CFR
				314.2, as it may be amended from time to
				time.
(20) "Initial application"
				means the submission of a borrower's financial information in anticipation of a
				credit decision relating to a mortgage loan, which shall include the borrower's
				name, the borrower's monthly income, the borrower's social security number to
				obtain a credit report, the property address, an estimate of the value of the
				property, and the mortgage loan amount sought
(21) "Internal audit" means the internal
				independent and objective assurance and consulting activity performed to
				evaluate and improve the effectiveness of a licensee's operations, risk
				management, internal controls, and governance processes.
(22) Lender.
(a) "Lender" means a person who makes a
				mortgage loan.
(b) "Lender", as
				used in these regulations, does not include a person acting as a:
(i) Mortgage broker; or
(ii) Mortgage servicer.
(23) "License" has the meaning
				stated in Financial Institutions Article, §
										11-501,
				Annotated Code of Maryland.
(24)
				"Licensee" has the meaning stated in Financial Institutions Article, §
										11-501,
				Annotated Code of Maryland.
(25)
				"Loan" as used in these regulations, unless the context indicates otherwise,
				means a mortgage loan.
(26) "Loan
				application" has the meaning stated in Financial Institutions Article, §
										11-501,
				Annotated Code of Maryland.
(27)
				"Loss mitigation option" has the meaning stated in 12 C.F.R. Part 1024, as it
				may be amended from time to time.
(28) "Mortgage lender" has the meaning stated
				in Financial Institutions Article, §
										11-501,
				Annotated Code of Maryland.
(29)
				"Mortgage loan" has the meaning stated in Financial Institutions Article,
				§
										11-501,
				Annotated Code of Maryland.
(30)
				"Mortgage loan originator" has the meaning stated in Financial Institutions
				Article, §
										11-601,
				Annotated Code of Maryland.
(31)
				Mortgage Servicer.
(a) "Mortgage servicer" has
				the meaning stated in Financial Institutions Article, §
											11-501,
				Annotated Code of Maryland.
(b)
				"Mortgage servicer" includes a person that engages in one or more of the
				following actions for the benefit of other persons in connection with mortgage
				loans;
(i) Performs the routine
				administration of mortgage loans as agent of a servicer or MSR investor under
				the terms of a subservicing contract;
(ii) Invests in and owns mortgage servicing
				rights and relies on subservicers to administer the mortgage loans on its
				behalf;
(iii) Collects or receives
				payments directly from borrowers for distribution to the owner of the mortgage
				loan or another third party, including a master servicer:
(iv) Evaluates borrower eligibility for loss
				mitigation options;
(v)
				Communicates with the borrower regarding loss mitigation options;
(vi) Is responsible for supervision of third
				parties that take action to protect a secured party's interest in the property
				under the applicable security instrument, such as maintenance of hazard and
				mortgage insurance coverage and preservation of the property; or
(vii) Conducts or supervises the foreclosure
				process, except if the person is an attorney representing a mortgagee or its
				successors and assigns, or acting as a substitute trustee in a foreclosure
				action under a deed of trust.
(32) "Mortgage servicing rights" or "MSR"
				means the contractual right to service a mortgage loan on behalf of the owner
				of the associated mortgage in exchange for specified compensation in accordance
				with the servicing contract.
(33)
				"MSR Investor" means a person who invests in and owns mortgage servicing rights
				and relies upon subservicers to administer the mortgage loans on the person's
				behalf, and who may be referred to as a master servicer.
(34) "NMLS" has the meaning stated in Financial
				Institutions Article, §
										1-101,
				Annotated Code of Maryland.
(35)
				"Person" has the meaning stated in Financial Institutions Article, §
										11-501,
				Annotated Code of Maryland.
(36)
				"Processing", when used in the context of processing a loan application, means
				the:
(a) Collection of data, documents, and
				other materials which a lender or broker requires in order to evaluate whether
				a loan will be granted or denied;
(b) Preparation of all materials necessary
				for closing a loan; and
(c)
				Scheduling of the closing of a loan.
(37) "Residential real estate" has the
				meaning stated in Financial Institutions Article, §
										11-501,
				Annotated Code of Maryland.
(38)
				"Risk management program" means the policies, procedures, and internal controls
				designed to identify, measure, monitor and mitigate risk.
(39) "Serviceprovider" has the meaning stated
				in 16 CFR Part 314, as it may be amended from time to time.
(40) Social Media.
(a) "Social media" means an Internet website
				or application software that:
(i) Requires a
				person to register or create an account to become a member; and
(ii) Allows two or more members to
				communicate directly with one another.
(b) "Social media" includes an Internet
				website or application software that allows members to communicate by means of
				one or more of the following:
(i)
				Text;
(ii) Video;
(iii) Still photograph; or
(iv) Audio.
(c) "Social media" does not include an
				electronic mail account.
(41) "Subservicer" means a person performing
				the routine administration of mortgage loans as an agent of a servicer or MSR
				investor under the terms of a subservicing contract.
(42) "Trade name" means any word or group of
				words used to identify a business to the public.
(43) "Underwriting" means the evaluation of
				information and materials about the loan, the applicant, and the property which
				will secure the loan, to determine whether the loan will be made or
				denied.