September 25, 2025

House Bill 1018, enacted during Maryland’s General Assembly during its 2025 session and signed into law by Governor Wes Moore, goes into effect on October 1, 2025. The law will require certain mortgage loans to include a provision allowing a borrower, after a divorce decree awards them the property, to: (1) assume the loan and (2) purchase the co-borrower’s interest, provided the lender finds the borrower qualified for the assumption.

This “assumption requirement” applies to any “conventional home mortgage loan” not already required by state or local law/regulation to be assumable in connection with a divorce. House Bill 1018 also provides that the “assumption requirement” be construed to apply retroactively to any conventional home mortgage entered into prior to the effective date of the law.

The law also mandates that lenders, including brokers, provide written disclosure of this provision to applicants before the “completion of the loan application.” Because the statute does not define that phrase, industry members have raised compliance questions. For now, the Maryland Office of Financial Regulation (OFR) will consider lenders compliant if the disclosure is given before receiving financial documentation or, alternatively, within three (3) business days of a complete application, with future regulations expected.

DISCLAIMER

This publication may constitute attorney advertising under the laws and rules of professional conduct of one or more states. The information provided in this publication is for general informational purposes only and does not constitute legal advice. The contents are not intended to be a substitute for professional legal advice, consultation, or representation. No attorney-client relationship is formed by reading or relying on this publication. Prior results do not guarantee a similar outcome. Readers should consult a qualified attorney for advice regarding their individual circumstances or any specific legal questions they may have.

If you have questions about this publication, please contact Adam Friedman, Ralph Vartolo or Michael DeRosa,
Friedman Vartolo LLP, 1325 Franklin Avenue, Suite 160, Garden City, NY 11530, Phone: (212) 471-5100 | Fax: (212) 471-5150.