Bill > SB689

This bill requires banking institutions, credit unions, mortgage lenders, mortgage lending businesses, and mortgage loan originators to include a specific provision in conventional home mortgage loans that allows an existing borrower to purchase the property interest of another borrower during a divorce, provided the assuming borrower qualifies for the loan. The bill applies specifically to conventional home mortgage loans that are not already mandated by state or federal law to be assumable in divorce situations. A key requirement is that the lending institution must disclose this assumption provision in writing to the loan applicant before completing the loan application. The bill defines a "conventional home mortgage loan" as a loan primarily for personal, family, or household use that is secured by a mortgage or deed of trust on a dwelling, excluding loans already insured or guaranteed by the federal government. The legislation also includes a retroactive provision that allows existing conventional home mortgages exceeding Federal Housing Finance Agency lending limits to be deemed as including this assumption provision for divorces occurring on or after the bill's effective date, which is set for October 1, 2025. This change aims to provide more flexibility for borrowers going through a divorce by making it easier to transfer property interests and mortgage responsibilities.

Budget and Finance, Business and Industry

https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/SB0689?ys=2025RS