2010 Maryland Code
FINANCIAL INSTITUTIONS
TITLE 11 - CONSUMER CREDIT
Subtitle 5 - Maryland Mortgage Lender Law
Section 11-508.1 - Lender net worth requirements.

§ 11-508.1. Lender net worth requirements.
 

(a)  In general.- 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 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 or licensee that does not lend money secured by a dwelling or residential real estate, in the amount of $25,000; and 

(2) In the case of an applicant or 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)  Manner of satisfying net worth requirement.-  

(1) Subject to paragraphs (2) and (3) of this subsection, the minimum net worth requirements under subsection (a)(2) of this section may be satisfied by the applicant or licensee having: 

(i) Cash on deposit with a bank or depository institution; 

(ii) A line of credit from a bank or depository institution; 

(iii) Other assets; or 

(iv) A combination of cash, a line of credit, or other assets. 

(2) If cash is used toward satisfying the minimum net worth requirements under subsection (a)(2) 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 line of credit is used toward satisfying the minimum net worth requirements under subsection (a)(2) of this section, the applicant or licensee shall submit to the Commissioner a copy of the line of credit agreement and the promissory note. 

(ii) A line of credit may not be used toward satisfying more than 75% of the minimum net worth requirements under subsection (a)(2) of this section. 
 

[2008, ch. 7, §§ 2, 7; ch. 8, §§ 2, 7; 2009, ch. 4; 2010, ch. 106.]