ANNAPOLIS, Md. — Maryland’s intermediate appellate court has ruled that mortgage servicers who take over loans governed by the state’s Credit Grantor Closed End Credit Provisions are treated as “credit grantors” and can face steep penalties for charging unauthorized convenience fees.
In a reported opinion filed Nov. 25, 2025, the Appellate Court of Maryland affirmed an Anne Arundel County judge’s decision in a dispute between borrower Tonda M. Baxter and Lakeview Loan Servicing LLC and its sub-servicer, Nationstar Mortgage LLC, over phone payment “convenience fees” added to her home loan account.
The court held that a company that acquires servicing rights on a loan governed by the Credit Grantor Closed End Credit Provisions, known as CLEC, qualifies as a credit grantor because it holds “rights and obligations under the debt instrument” — in this case, Baxter’s promissory note. The decision means servicers that step into the shoes of a lender must comply with CLEC’s fee restrictions for as long as the loan is outstanding…