Maryland Legislative Update

Maryland Legislative Update

The Maryland legislature recently amended its laws governing common ownership communities, and title commitments, and mortgage loan originators.  All the legislation discussed in this memorandum is effective October 1, 2014.

 

MARYLAND HOUSE BILL 602

 

A governing body of a common ownership community may foreclose on a lien against a unit owner or lot owner only if the damages secured by the lien:

  • Consist of:
    • Delinquent periodic assessments or special assessments and any interest; and
    • Reasonable costs and attorney’s fees directly related to the filing of the lien that do not exceed the amount of the delinquent assessments, excluding any interest; and
  • Do not include fines imposed by the governing body or attorney’s fees or costs related to recovering the fines.

 

MARYLAND SENATE BILL 624

 

“Abstract of title” means a representation of the state of title to property based on a review of the records that impart constructive notice relating to title to property in Maryland.  This term includes a report of title and any other written or electronically created or preserved representation of the state of title to property.

 

“Title insurance commitment” means a written statement of the terms and conditions on which a title insurer is willing to issue a policy of title insurance if the title insurer accepts a premium for the policy.  This term includes a binder.

 

In addition to the current requirements, when in connection with a real estate transaction that involves a purchase money mortgage or deed of trust on land in Maryland, a title insurer accepts a premium for a policy that insures the title to the property or the title insurer, its agent, or employee accepts a premium for lender title insurance, the person first accepting the premium:

  • Must insert the name of each insured in the title insurance commitment (previously binder) for the title insurance (previously or title report); and
  • Immediately on receipt of the premium, must deliver to the buyer or agent or attorney of the buyer written notice:
    • That the buyer’s title insurance will be subject only to the contingencies and conditions contained in the title insurance commitment (previously binder and title report) and policy;
    • Of the buyer’s right to review the title insurance commitment or a sample of the form of policy in which the contingencies and conditions will be inserted; and
    • That the title insurance commitment or sample of the form of policy into which the contingencies and conditions for insuring will be inserted:
      • Does constitute a statement of the terms and conditions on which the title insurer is willing to issue its policy of title insurance if the title insurer accepts a premium for the policy;
      • Is not a representation as to the state of title; and
      • Does not constitute an abstract of title.

 

A title insurance commitment or sample of the form of policy into which the contingencies and conditions for insuring will be inserted:

  • Constitutes a statement of the terms and conditions on which a title insurer is willing to issue a policy of title insurance if the title insurer accepts the premium for the policy;
  • Is not a representation as to the state of title; and
  • Does not constitute an abstract of title.

 

The rights, duties, and responsibilities applicable to the preparation or issuance of an abstract of title do not apply to the issuance of a title insurance commitment or sample of the form of policy into which the contingencies and conditions for insuring will be inserted.

 

A title insurance commitment or sample of the form of policy into which the contingencies and conditions for insuring will be inserted must contain the following statement:

 

“This document constitutes a statement of the terms and conditions on which a title insurer is willing to issue a policy of title insurance if the title insurer accepts the premium for the policy.  It is not a representation as to the state of title and does not constitute an abstract of title.”

 

The above provisions must not be applied or interpreted to have an effect on or application to any abstract of title or title insurance commitment completed before October 1, 2014.

MARYLAND SENATE BILL 1091

 

The Commissioner of Financial Regulation (“Commissioner”) will publish prominently on the Commissioner’s website, or have published on a third-party website used for licensing mortgage loan originators in Maryland, an expedited process for the issuance of a mortgage loan originator license for those applicants, who within 45 days before the date of application for the licenses, were employed as a registered mortgage loan originator.  The expedited process may waive, when applicable, the Maryland criminal history record check.  The Commissioner’s website can be found at: http://www.dllr.state.md.us/finance/industry/mortorig.shtml.

 

The legislation also deleted the provisions of Maryland law regarding interim or transitional mortgage loan originator licenses and their requirements.