As Maryland rolls out a new law this week requiring people who arrange mortgage loans for borrowers to be individually licensed, legislators on Capitol Hill yesterday criticized such state efforts as creating a jumbled pattern of conflicting regulations and urged federal action instead.

The new Maryland law, which goes into effect Saturday, will require individual mortgage brokers and all employees who deal with the public on loans to obtain state licenses. Previously, licenses were issued to the companies. About 12,000 lending industry employees in Maryland, including people who solicit customers for mortgage loans or accept applications on a lender's behalf, will need to be registered by the state by January 2007. They will also be required to undergo criminal background checks to get licenses.

The law, which expands existing state law, will also permit consumers to bring complaints about improper mortgage loans to state officials, who will have the power to fine violators up to $25,000, imprison them for up to five years, or both. The Maryland financial regulation division is hiring 30 workers to examine licensing applications and investigate lending wrongdoing.

Almost all states require mortgage brokerage firms to be licensed in some way, but about 24 states, like Maryland, have created additional requirements, including requiring employees to hold licenses. Virginia and the District license mortgage brokerage firms.

At a hearing before the House subcommittee on housing and community opportunity yesterday, Rep. Robert W. Ney (R-Ohio) said the profusion of such laws is creating a troublesome "patchwork" of mortgage lending regulation, posing problems for the industry. He said "minimum standards for uniformity" may be needed. A law he has proposed would direct the Department of Housing and Urban Development to establish mortgage broker licensing requirements and create a national registry that would allow law enforcement officials to track problem brokers.

Teresa A. Bryce, senior vice president of Nexstar Financial Corp., a Missouri-based mortgage banking company, also criticized the new state laws, saying they would raise the cost of mortgage originations and reduce innovation in lending.

The debate is occurring because mortgage fraud is rising. Some critics have charged that consumers are being improperly steered to more expensive loans by unscrupulous mortgage originators -- either mortgage brokers or bankers -- who gain their confidence by friendly visits to their homes, where they conduct the closings at the kitchen table. They note that the lending industry typically pays bonuses to mortgage originators who induce consumers to pay more for a loan than they would otherwise based on their credit scores.

"They have a financial incentive to betray the trust" of borrowers, said Rep. Brad Miller (D-N.C.), who has proposed predatory-lending legislation that he says would make it harder for unethical mortgage brokers to operate.

At the Capitol Hill hearing, panelists agreed that some new federal system should be established for tracking mortgage originators but disagreed over who should be included in such coverage. Joseph L. Falk, representing the National Association of Mortgage Brokers, said that he supports the creation of a national registry for mortgage originators but that it should include all mortgage-loan originators, such as mortgage bankers, not just mortgage brokers.

Joseph Rooney, deputy commissioner of financial regulation in Maryland, dismissed criticism that Maryland is contributing to a patchwork system of regulation. He said mortgage industry officials in Maryland pushed for the licensing law because they want to get rid of "bad apples" at a time Maryland has seen an increase in mortgage fraud.

"States are trying to step up to the plate because there's no federal regulation," Rooney said, adding that the criminals in the industry "go to the places where regulation is the loosest."