Maryland Legal Alert for Financial Services

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Maryland Changes to Money Transmission Licensing

FHA Eliminates Mandatory Appraisal Field Reviews for Quality Control Reviews

Maryland Changes to Money Transmission Licensing

The Maryland Money Transmission Act (MTA) regulates entities and individuals engaged in money transmission in Maryland. The MTA requires “money transmitters” to comply with specific licensing requirements. Under the MTA, a money transmitter is defined as those engaging in the business of selling or issuing payment instruments or transmitting monetary value to another by any means. The Maryland General Assembly recently provided an additional licensing exemption under the MTA.  House Bill 118 exempts from the licensing requirements specific payroll processing providers. Prior to enactment of the new law, the MTA required all payroll processors to obtain a money transmitter license. 

Under the new law, payroll processors are exempt from MTA licensing if the following conditions are met: (1) a written agreement is in place directing the payroll processor to provide services on behalf of the employer; (2) the employer holds the processor out to employees as providing payroll services on the employer’s behalf; and (3) the employer’s obligation to pay the employees is not extinguished if the processor fails to deliver funds to employees. 

For more information concerning this topic, please contact Christopher R. Rahl or Peri L. Schuster.  

Contact Peri L. Schuster | 410-576-4005

Contact Christopher R. Rahl | 410-576-4222

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FHA Eliminates Mandatory Appraisal Field Reviews for Quality Control Reviews

On June 23, 2026, the Federal Housing Administration (FHA) issued Mortgagee Letter 2026-10, effective immediately, revising its appraisal quality control (QC) requirements for FHA-approved mortgagees. The Mortgagee Letter applies to all FHA-insured mortgage programs and eliminates the longstanding requirement that lenders obtain appraisal field reviews for at least 10% of loans selected for origination and underwriting quality control review. Previously, field reviews were also required for certain higher-risk loans, including those involving early payment defaults, borrower complaints, and unresolved appraisal issues. Under the revised guidance, appraisal field reviews are now optional, allowing mortgagees to tailor their appraisal review methods based on case-specific risk while maintaining FHA's core appraisal compliance framework. 

Although field reviews are no longer mandatory, mortgagees must continue to evaluate all property documentation and appraisal reports for completeness, technical accuracy, overall quality, and compliance with FHA requirements. FHA encourages lenders to utilize risk-based review methods, including appraisal desk reviews, Automated Valuation Models (AVMs), multiple listing service data, public records, and other appropriate valuation tools to identify potential valuation errors or compliance concerns. Any appraisal field review that is conducted must still be completed by an appraiser listed on the FHA Appraiser Roster. Mortgagees also remain responsible for retaining documentation supporting their appraisal quality control reviews, including valuation tool reports, any appraisal field reviews performed, review findings, and corrective actions taken. 

Practice Pointer: FHA-approved mortgagees should review and update their quality control policies and procedures to reflect the revised guidance, including removing references to mandatory appraisal field review sampling, incorporating risk-based criteria for determining when field reviews remain appropriate, and ensuring documentation and record retention practices continue to satisfy FHA requirements.

For more information concerning this topic, please contact Tamia J. Morris

Contact Tamia J. Morris | 410-576-4021

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