KBRA Releases Research – Maryland Licensing Rule Update

NEW YORK--(BUSINESS WIRE)--KBRA releases an update to a KBRA report published in mid-January regarding the Maryland Office of Financial Regulation (OFR) notice of emergency regulations and formal guidance regarding the applicability of Maryland licensing laws to assignees of mortgage loans on properties in Maryland. The rule, issued on January 10, 2025, requires mortgage trusts and their assignees to obtain licenses under Maryland’s Installment Loan Licensing Law and Mortgage Lender Law.

The OFR issued supplemental guidance on January 31 clarifying that statutory exemptions from the licensing requirements apply to Fannie Mae, Freddie Mac, Ginnie Mae, and any other federal, state, and local governmental loan purchase programs, as well as any trusts created by these entities. Although the clarification is welcome news for the Agency mortgage-backed securities (MBS) market, the regulations still appear to impact non-Agency MBS transactions.

Of the over $264 billion in non-Agency mortgage securitization debt currently outstanding, $3.7 billion in Maryland loan balances are currently financed by the U.S. non-Agency securitization market. The rule and related guidance, if left in force, will likely curtail non-Agency volume in the future. This could ultimately reduce the availability of funding sources for Maryland borrowers and/or lead to higher costs, which would be passed on to the borrowers.

Click here to view the report.

Related Publication

• Maryland Licensing Rule: Roadblock for Mortgage Securitization?

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KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

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