Committee advances mortgage‑assignment bill amid "zombie mortgage" concerns

The Economic Matters Committee approved House Bill 1516, which clarifies that certain consumer credit provisions in the Financial Institutions Article generally do not apply to a person who acquires or is assigned a mortgage in whole or in part if that person does not otherwise make mortgage loans or engage in the mortgage lending business.

Members heard testimony and discussion about so‑called "zombie mortgages" — assigned or defaulted mortgage claims that can create confusion for borrowers and real‑estate transfers. A committee speaker said opponents were concerned about a small sector of the secondary mortgage market and the bill is intended to maintain the secondary market’s operation while addressing problem cases flagged by court rulings.

The sponsor said the House and Senate versions differ slightly; the committee sought to advance its bill without amendments while participants in both chambers work toward alignment. The motion to move the bill in favor carried on roll call and the bill was advanced from committee.

Committee members requested further follow‑up in subsequent negotiations between chambers to ensure the narrow concerns about defaulted or improperly assigned mortgages are resolved prior to final passage.