Sec. 09.03.06.19. Ability to Repay

A. Purpose and Scope.

(1) The General Assembly has determined that it is in the public interest to require lenders to comply with special rules with respect to certain mortgage loans.

(2) This regulation applies to loans subject to Commercial Law Article, §§12-127, 12-311, 12-409.1, and 12-1029, Annotated Code of Maryland.

B. Subject to §C of this regulation, a lender shall give due regard to the borrower’s ability to repay the mortgage loan, as follows:

(1) A borrower’s monthly gross income shall be compared to the nonmetropolitan median family income for the county in which the property is located, as reported in the most recent estimates made available by the United States Department of Housing and Urban Development as of the date of initial application for a loan if the residential real estate securing the loan of a borrower is not located in a metropolitan statistical area;

(2) A borrower’s total scheduled monthly payment obligations are the amounts required to be paid to satisfy the borrower’s legally enforceable minimum monthly financial obligations as of the date of initial application for a loan;

(3) A borrower’s total scheduled monthly payment obligations include secured and unsecured debt, alimony, child support, and other similar legally enforceable financial obligations payable in two or more installments;

(4) A borrower’s total scheduled monthly payment obligations do not include any debts that are consolidated with, or paid off by, a mortgage loan; and

(5) A lender’s consideration of a borrower’s scheduled monthly payment obligations may be limited to information provided directly by the borrower and verified by a consumer report from a consumer reporting agency, unless information provided by the borrower or the consumer reporting agency reasonably leads to further investigation by the lender.

C. Compliance with applicable provisions in 12 CFR Part 1026.43, as it may be amended from time to time, may be substituted for the obligations required by, and shall be sufficient to meet the requirements of, §B of this regulation.