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Mortgage
Tax
Mortgage recordation tax varies by county,
ranging from $3.30 to $10.00 per thousand dollars of consideration.
This fee should be included on the borrower’s initial
Good Faith Estimate.
Discount Points
Maryland law does not regulate loan discount
fees for rate-and-term first-liens. For HELOC (open-end)
first liens, bona fide discount points, where the borrower
buys down the interest rate and remains within the APR limits,
can not exceed 9.00% of the original loan amount. Discount
points are prohibited for subordinated liens. Lien position
will determine discount point eligibility.
Permitted Fees
Lender fees: For first liens, Lenders can
only charge administration fees, application fees, appraisal
fees, attorney fees, bona fide discount points, credit report
fees, doc prep & review fees, escrow waiver fees, exact
third-party fees for services actually rendered, funding
fee, insurance premiums, origination fees, processing fees,
pre-payment penalties for ARMs where the interest rate does
not exceed 8.00%, tax service fees, transfer & assumption
fees, and underwriting fees.
For subordinated liens, only exact third-party fees for
services actually rendered only by public officials or government
agencies, insurance premiums, origination fees, and title
fees. As a lender, we can only charge an origination fee.
For HELOCs, Lenders can only charge appraisal fees, attorney
fees, bona fide discount points up to 10% of credit limit,
insurance premiums, origination fees up to 10% of credit
limit, and title costs. For first-lien HELOCs you can also
charge exact third-party fees for services rendered only
by public officials or government agencies.
Broker fees: Brokers can only charge appraisal
fees, mortgage broker fees / origination fees, credit report
fees, and exact third-party fees for services actually rendered.
Prohibited Fees
No advance fees, commitment fees, deferral
fees, lock-in fees, broker admin fees, broker processing
fees, referral fees, single premium insurance products,
unearned fees, and warehouse fees.
Lender fees: For subordinated-liens, no
administrative fees, application fees, attorney fees, bona
fide discount points, credit report fees, doc prep &
review fees, flood certification fees, prepayment penalties,
processing fees, tax service fees, transfer & assumption
fees, and underwriting fees.
For HELOCs, no administration fee, application fee, balloon
features, credit report fee, doc prep & review fees,
flood certification fee, pre-payment penalties, processing
fees, tax service fee, transfer & assumption fee, and
underwriting fee.
Broker fees: All fees not expressly-approved
above are prohibited, such as administrative fees and processing
fees.
Note: If a mortgage broker, in any 24-month
period, obtains more than one mortgage loan that is secured
by the same property, the mortgage broker may charge a broker’s
fee only on the increased amount that exceeds the amount
of the prior loan that is secured by the same property.
Late Charge Fees
Maryland law allows lenders to collect late
payment charges as long as they are specifically explained
within the loan contract. A late charge may only be assessed
if the payment is not made in full after 15 days beyond
the installment due date for first-liens, and after 10 days
for subordinated-liens. Late charges will not exceed 5%
of the installment due, or $2, whichever is larger. Payments
must first be applied to the most recent installment due,
and a lender may not impose a late charge more than once
for the same installment or portion thereof.
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Funding
Settlement
Wet state. If funds are not disbursed in
a timely manner, a lender may not charge interest for the
first 30 days following disbursement.
Borrower Signing Requirements
A person does not need to sign any documents
if that person is not going on the loan, unless they are
currently on title. Maryland is a not a community property,
nor a dower/curtsey state. Maryland law allows for homestead
exemptions, but not so for mortgages or deeds of trust.
Closing Customs
Closings are generally conducted by independent
attorneys, or title companies with attorneys who are licensed
by the state of Maryland. For second-trust deed loans, applications
may be taken anywhere, but closings must occur in a Maryland-licensed
attorney’s office or at a title company office. Closings
may NOT take place anywhere else, unless specifically requested
by a borrower in writing to accommodate borrower medical
conditions. Borrowers must have access to the right to legal
counsel. Conveyance is typically executed with a Grant Deed.
The encumbrance is usually a “Deed of Trust”
for institutional lenders.
Real Estate Taxes
Taxes are due annually on July 1st.
Taxes are delinquent September 30th. To estimate the property
taxes for a purchase transaction, use 1% of the sales price.
For a refinance transaction, refer to the amount of the
last annual property tax assessment.
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