1624                            JOINT RESOLUTIONS

No. 18
(Senate Joint Resolution 31)

Senate Joint Resolution requesting the Legislative Council to appoint
a Special Committee to study abusive practices in prefabricated
home financing.

Whereas, Numerous Maryland purchasers of pre-built and pre-
fabricated houses from out-of-state concerns have encountered the
following practices:

(a)    Usurious interest charges are concealed in the notes and
deeds of trust given therefor;

(b)  The amount of payments are misrepresented, as for example
by stating monthly payments to be some small amount, and conceal-
ing the existence of a "balloon note" due at the end of some period
for the large balance remaining;

(c)   Reduction of the principal amount of the indebtedness be-
comes a complicated and doubtful matter, and the purchaser can
never find out just how much interest he has paid and how much
principal balance remains;

(d)    Final release of the deed of trust for record becomes a major
legal endeavor;

(e)    The assignees of the instruments, and sometimes the original
parties thereto, are out-of-state straws and subsidiaries whose iden-
tity, location, and responsibility are such as to frustrate the pur-
chaser's attempts to obtain honest information and retire his just
indebtedness in an orderly fashion;

(f)  When the purchaser is finally forced to seek legal redress,
he finds that the corporations with whom he has been dealing have
no resident Maryland agents and are effectively immune from suit;
and

Whereas, Comparable abuses are not tolerated in the retail install-
ment sales of personal property; and

Whereas, Other Eastern states have laws and regulations control-
ling such practices in the home finance field, with the result that
unscrupulous operators concentrate their activities in Maryland; and

Whereas, A demand for action has arisen from purchasers, from
members of the Bar, from Maryland home builders, and Maryland
lending institutions; and

Whereas, Seven proposals have been before the 1965 and previous
session of the General Assembly, aimed at one or more facets of the
problem; now, therefore, be it

Resolved by the General Assembly by Maryland, That the Legisla-
tive Council is requested to appoint a Special Committee of interested
Senators and Delegates and representatives of the public with knowl-
edge of the subject, to investigate said practices, undertake a com-
parative study of legislation, and report its conclusions and recom-
mendations to the General Assembly.

Approved May 4, 1965.