Md. Code Regs. 05.06.06.03

Current through Register Vol. 51, No. 24, December 2, 2024

Section 05.06.06.03 - Definitions

A. In this chapter, terms appearing in the Act have the meanings as defined in the Act, and, in addition, the meanings used in these Regulations.

B. Terms Defined.

(1) "Act" means Housing and Community Development Article, Title 3, Subtitle 2, Annotated Code of Maryland.

(2) "Aggregate loss limit" or "stop loss" means the maximum payout by the Fund in payment of claims under a particular mortgage pool insurance policy, whether stated as a dollar amount or a percentage of the total principal amount of mortgages insured by the policy.

(3) "Applicant" means an individual applying to a lender for a mortgage.

(4) "Appraisal" means a written evaluation of a property performed by a residential real estate appraiser licensed by the State.

(5) "Assignment of mortgage" means a transfer of ownership of a mortgage from one lender to another or to the Fund.

(6) "Assumption agreement" means an agreement by one borrower to pay an obligation originally incurred by another.

(7) "Beneficiary" means the lender named in a promissory note or any successor or assign of the lender.

(8) "Borrower" or "mortgagor" means the original borrower under a mortgage loan and that borrower's successors and assigns by operation of law or as approved by the Fund.

(9) "Claim" means the timely filed written request by an insured for payment by the Maryland Housing Fund on an insurance policy.

(10) "Closing costs" means:

(a) Financing costs such as the credit report fee, appraisal fee, home inspection fee, survey fee, title examination, loan origination fee, title insurance fee, and application fee; and

(b) Title fees such as the attorney's fee, documentation and preparation fee, recording fee, State and local transfer tax, and documentary stamps.

(11) "Co-insurance" means an agreement between two or more insurers regarding allocation of risk, and containing other terms or conditions agreed upon between the insurers.

(12) "Collateral" means the security given as a pledge for the fulfillment of an obligation.

(13) "Condominium" means a multi-unit structure or project subject to a condominium regime under Real Property Article, § 11-102, Annotated Code of Maryland.

(14) "Condominium unit" means an individual unit in a condominium.

(15) "County" means a county of Maryland, including Baltimore City.

(16) "Deed of trust" means a written instrument, including a mortgage, creating a lien against real property for the purpose of securing repayment of a loan.

(17) "Default" means the failure of a borrower to repay the obligation of a note, or otherwise to fully perform according to the terms provided in a deed of trust.

(18) "FHLMC" means the Federal Home Loan Mortgage Corporation.

(19) "FNMA" means the Federal National Mortgage Association.

(20) "Forbearance" means the act of refraining from taking legal action against a borrower despite arrearage in a mortgage loan.

(21) "Foreclose" means legal action to deprive the borrower of all right, title, and interest in the collateral securing a loan in default.

(22) "Fund" or "MHF" means the Maryland Housing Fund.

(23) "Insurance" means protection against financial loss that may occur as a result of the collateral proving insufficient to repay a loan obligation that is secured by a mortgage.

(24) "Insurance endorsement" means the legally binding acceptance of an obligation to insure in accordance with the terms of the policy.

(25) "Lender" or "mortgagee" means the original lender of a mortgage loan and its successors and assigns.

(26) "Loan-to-value ratio" or "LTV" means the ratio of the mortgage loan amount to the appraised value of the property or the sales price of the property, whichever is less. The dollar amount of the mortgage loan is divided by the dollar amount of the appraised value of the property, or by the dollar amount of the sales price of the property, whichever is less. The resultant figure is expressed as a percent.

(27) "Manufactured home" means a structure designed to be used as a dwelling, which:

(a) Is a multisectional structure fabricated on or after June 15, 1976, in an off-site manufacturing facility for installation or assembly at the building site;

(b) Is not less than 24 feet in width and 40 feet in length;

(c) Is installed permanently on an engineered foundation in conformance with the code promulgated by the BOCA National Building Code, which is incorporated by reference under COMAR 05.02.05, or the standards set by the American National Standards Institute, Inc., which are incorporated by reference under COMAR 05.02.02, and is not independently capable of movement;

(d) Has brick, wood, aluminum, or cosmetically equivalent exterior siding and a pitched composition shingle or wood shake roof;

(e) Is certified by:

(i) The United States Department of Housing and Urban Development as a manufactured home in accordance with the National Manufactured Housing Construction and Safety Standards Act of 1974, as amended, or

(ii) The Department of Housing and Community Development as an industrialized building in accordance with Public Safety Article, § 12-308, Annotated Code of Maryland;

(f) Complies with all requirements set forth in COMAR 05.02.04 and Maryland Housing Fund minimum property and appraisal standards and requirements;

(g) Is installed on real property the borrower owns in fee simple or under a freely transferable ground rent lease, and the legal title to the improvements runs with the real property;

(h) Meets all applicable zoning requirements as to number of dwelling units, lot size, and building setbacks; and

(i) Is reasonably expected to have an economic life equal to or greater than the term of the mortgage.

(28) "Mortgage loan" means a loan, repayment of which is secured by a mortgage or deed of trust.

(29) "Note" means a promissory note evidencing an obligation to repay a loan, repayment of which is secured by a mortgage or deed of trust, and setting forth the amount and terms for repayment of the loan.

(30) "Pool insurance" means insurance coverage subject to a policy of pool insurance which insures a lender against loss on a pool of mortgage loans, when losses exceed the limit of primary mortgage insurance coverage on loans within the pool.

(31) "Premium" means that amount paid for primary mortgage insurance coverage or for pool insurance coverage.

(32) "Prepaid expenses" means costs due at the time of closing which are required by the lender to be paid in connection with closing a mortgage loan, such as property taxes, ground rent, hazard insurance, condominium or homeowners association fees if applicable, and mortgage insurance premium.

(33) "Primary insurance" means mortgage insurance coverage which insures a lender against loss up to a percentage of the original mortgage loan amount, resulting from a borrower's default.

(34) "Project" means a group of eligible single family properties constructed or rehabilitated by a developer, which may be a:

(a) Subdivision or a portion of a subdivision; or

(b) Scattered-site project.

(35) "Public agency" means any Maryland county or municipal corporation, or any board, commission, agency, department, authority, or instrumentality of the State or of any Maryland county or municipal corporation.

(36) "Public mortgagee" means any qualified public agency that makes or purchases single family mortgages.

(37) "Qualified appraiser" means an appraiser who is licensed under applicable licensing requirements of the State and federal governments and submits work of a quality acceptable to the Maryland Housing Fund.

(38) "Real property" means land and the improvements on it, including the rights and benefits of ownership.

(39) "Reinsurance" means provision of insurance under an agreement between two or more insurers whereby a portion of risk is covered by the secondary insurer and having such other terms and conditions as the parties agree to.

(40) "Secretary" means the Secretary of Housing and Community Development.

(41) "Settlement costs" mean all closing costs and prepaid expenses.

(42) "Single family reserve" or "reserve" means the Single Family Regular Program Reserve as described in Regulation .04 of this chapter.

(43) "Single family property" means owner-occupied one-to-four unit residential property.

Md. Code Regs. 05.06.06.03

Regulation .03B amended as an emergency provision effective December 8, 1995 (22:26 Md. R. 2026); amended permanently effective July 1, 1996 (23:13 Md. R. 940)