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Md. high court denies would-be lender’s forgery appeal, cites licensing law

A woman’s 20-year-old guilty plea to forgery and identity theft will stay on the books as Maryland’s top court said her unforeseen disqualification from a mortgage lending license did not justify permitting her otherwise too-late appeal of her conviction.

In its 7-0 decision this week, the Court of Appeals said Maryland’s statutory ban on those convicted of a felonious fraud from receiving a lending license prevented Kenyatta M. Smith’s belated appeal, regardless of its merits.

Courts may grant a late appeal — a petition for error coram nobis — if the “collateral consequence” of the conviction was unforeseen and severe, such as a convicted immigrant’s deportation.

But the consequence of Smith’s conviction — license disqualification — did not rise to the requisite level of severity as other jobs exist and the General Assembly has made clear under Maryland’s Financial Institutions statute its strong desire to protect the integrity of mortgage lending through licensure, the Court of Appeals said.

The high court’s decision upheld denials of Smith’s petition by the Baltimore County Circuit Court and the intermediate Court of Special Appeals, which cited the 2009 Maryland law and its federal equivalent, the 2008 Secure and Fair Enforcement for Mortgage Licensing Act, or SAFE.

Both laws were enacted in response to the mortgage lending crisis of the early 2000s.

“Members of the mortgage loan industry are given access to people’s private financial information and therefore it is in the general public’s interest that individuals employed as mortgage loan originators are of good moral character,” Judge Joseph M. Getty wrote for the Court of Appeals.

“A review of the legislative history of FI § 11-605 clearly indicates that the General Assembly, in accordance with the SAFE Act’s federal mandate, intended to combat the problems arising from the dishonesty and untrustworthiness amongst individuals employed in the mortgage loan industry in enacting and subsequently amending FI § 11-605,” added Getty, a retired judge sitting by special assignment. “The legislative purpose of FI § 11-605 is a relevant consideration for the circuit court where granting Ms. Smith’s petition would effectively circumvent the federally mandated prohibition against Ms. Smith receiving a mortgage loan originator’s license set forth in FI § 11-605.”

The Maryland attorney general’s office and Smith’s appellate attorney, Assistant Maryland Public Defender Michael T. Torres, declined to comment on the court’s decision.

Smith pleaded guilty in September 2002 to having impermissibly used her former employer’s name and Social Security number to obtain a $40,000 commercial loan, which she deposited into her personal bank account. She used the ill-gotten gains to buy a Lexus from a Reisterstown car dealership, according to the high court’s opinion.

A Baltimore County Circuit Court judge sentenced her to three years in prison, all suspended. Smith sold the automobile and used the proceeds to begin repaying the loan, which she converted to her name and paid the balance, the opinion stated.

In 2015, Smith filed her petition for error coram nobis in the same court, claiming she pleaded guilty without ever being advised of the charged offenses or of the presumption of innocence had she chosen to go to trial.

Smith argued in vain that the granting of her belated appeal was warranted based on the unforeseen consequence that she would be denied a mortgage lending license for having pleaded guilty.

The Court of Appeals rendered its decision in Kenyatta M. Smith v. State of Maryland, No. 26, September Term 2021.