Maryland Court of Appeals Issues Faorable Ruling in MCALA Cases

On Thursday, August 2, the Maryland Court of Appeals issued a ruling that licensing requirements under the Maryland Collection Agency Licensing Act (MCALA) do not apply to non-Maryland statutory trusts. As a result of this ruling, a statutory trust does not have to obtain a collection agency license in order to proceed with a foreclosure action in Maryland. This ruling was to a consolidated appeal of four cases dealing with the MCALA licensing issue, and SFIG previously submitted an amicus brief to the Maryland Court of Appeals advocating that the court hold that MCALA licensing requirements not apply to statutory trusts.

SFIG believes that this ruling bodes well for the secondary RMBS market, given the widespread use of statutory trusts throughout the industry. A contrary ruling may have led to other states adopting similar legal regimes around licensing for trusts, leading to increased costs and legal uncertainty around the ability of a trust to foreclose upon a loan. However, the Court of Appeals’ ruling—based on legislative history of the Maryland General Assembly—should enable the continued use of trusts to purchase, hold, and sell loans in the secondary market. If you have further question on this case, or on SFIG’s RMBS advocacy efforts, please contact

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