On May 15, Maryland Governor Martin O’Malley signed HB 1045, which alters the conditions for refinancing without junior lienholder permission. Under current law, a mortgagor or grantor may refinance the full unpaid balance at a lower interest rate without the permission of the junior lienholder if (i) the principal amount secured by the junior lien does not exceed $150,000; and (ii) the principal amount secured by the refinance mortgage does not exceed the unpaid outstanding principal balance of the first mortgage or deed of trust plus an amount to pay closing costs of up to $5,000. The bill alters this threshold requirement for refinance mortgages to bypass junior lien holder permission by amending the second factor to include closing costs and escrow costs of up to $5,000. The bill defines “escrow costs” as money to pay property taxes, hazard insurance, mortgage insurance, and similar costs associated with real property secured by a refinance mortgage that a lender requires to be collected at closing and held in escrow. The change takes effect October 1, 2014.