A new directive issued by the Maryland Office of Financial Regulation last month will raise the cost of buying a home, and make financing harder to obtain, credit rating agency KBRA warned yesterday. The January 10, 2025 licensing rule update requires mortgage trusts and their assignees to obtain licenses under Maryland’s Installment Loan Licensing Law and Mortgage Lender Law. MOFR clarified that Fannie Mae, Freddie Mac, Ginnie Mae, all other federal, state, and local governmental loan purchase programs, as well as any trusts created by these entities, are exempt from the rule. However, as KBRA noted, $3.7 billion in Maryland loan balances are currently financed by the U.S. non-Agency securitization market.
"Non-agency" means private mortgage securities not backed by the aforementioned government and quasi-government agencies or entities. KBRA said the new licensing requirement will likely reduce the number of financing sources available to homebuyers in Maryland. For those who can still obtain financing, KBRA warned, the reduced competition and higher licensing costs will be passed on to homebuyers in the form of higher monthly payments. A new Washington Post/University of Maryland poll found the already-high cost of housing is now the top concern of Maryland voters.
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