Document Update: Maryland House Bill 1018 and New Document Maryland Assumption Notice (Cx28523)

On April 22, 2025, Maryland Governor Wes Moore signed into law House Bill 1018. This bill, effective October 1 2025, requires Mortgage Lenders, Credit Unions, and Banking Institutions to “disclose an assumption provision in any conventional home mortgage loan in writing to a loan applicant before the completion of the loan application.” (See 5-514(c), 6-606.1(c), and 11-522(B)).

The clause “before the completion of the loan application” is not defined in the statute. One interpretation could be that the disclosure would need to be disclosed before the six pieces information under the TRID definition of application. Another interpretation could be before the applicant completes the loan application or URLA. The most conservative interpretation would be to give the disclosure before collecting the six pieces of information under TRID. To ensure compliance, we will follow the most conservative interpretation and provide the disclosure before collecting the six pieces of information—i.e., in the Maryland Pre-Disclosure package.

We have created Cx28523, Maryland Assumption Notice, to disclose the assumption provision that is now provided on the Maryland security instruments as in the FNMA Maryland model form. We created a new document field trigger “Print Maryland Assumption Notice” (FI 193824) that will be globally mapped to “Yes” for all Maryland Pre-Disclosure packages. Clients may map the field to include the document in other document packages as needed.

We are also updating the logic on the LE/CD assumption disclosure required by 12 CFR 1026.37(m)(2). The interpretation to 37(m)(2) states, in part:

“If the creditor can determine that such assumption is not permitted, the creditor complies with § 1026.37(m)(2) by disclosing that the loan is not assumable. In all other situations, including where assumption of a loan is permitted or is dependent on certain conditions or factors, or uncertainty exists as to the future assumability of a mortgage loan, the creditor complies with § 1026.37(m)(2) by disclosing that, under certain conditions, the creditor may allow a third party to assume the loan on its original terms.”

Now that conventional home mortgage loans in Maryland in divorce scenarios may be assumable, we will check the box that the lender “will allow, under certain conditions, this person to assume this loan on the original terms.” This will be done by globally mapping "Assumable Loan" (FI 1170) to "Yes" for Maryland Conventional loans.

These changes are available for testing on Stage & Stage 2 servers and will take effect on October 1, 2025. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.

LEG-3241
DR-196123
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Update:

On September 25, 2025, the Maryland Office of Financial Regulation (OFR) issued guidance clarifying the timing requirements for the disclosure of the mortgage assumption provision in the event of divorce. The OFR acknowledged the ambiguity in the statutory language requiring disclosure “before the completion of the loan application.” To address this, the OFR stated it will presume compliance if the disclosure is provided within three business days of receiving a complete application, as defined in 12 CFR §1026.2(a)(3).

In response to this guidance, we will also use the global mapping on “Print Maryland Assumption Notice” (FI 193824) to begin including the Maryland Assumption Notice (Cx28523) in the Initial loan package to ensure timely delivery and regulatory compliance.

The preceding is for informational purposes only and is not and may not be construed as legal advice. No third-party entity may rely upon anything contained herein when making legal and/or other determinations regarding its practices, and such third-party should consult with an attorney prior to embarking upon any specific course of action.