1562                            LAWS OF MARYLAND                      [CH. 714

CHAPTER 714
(House Bill 41)

AN ACT to add new Sections 486-1 and 486-2 to Article 48A of the
Annotated Code of Maryland (1957 Edition), title "Insurance,"
subtitle "Title Insurance," to follow immediately after Section 486
486-1 thereof, requiring certain information be supplied mort-
gagors in connection with the closing of mortgage loans REAL ES-
TATE TRANSACTIONS when title insurance is required, and
providing a penalty for non compliance with these provisions FOR
THE PROTECTION OF THE MORTGAGEE MORTGAGOR.

Section 1. Be it enacted by the General Assembly of Maryland,
That new Sections 486-1 and SECTION 486-2 be and they are IT IS
hereby added to Article 48A of the Annotated Code of Maryland (1957
Edition), title "Insurance," subtitle "Title Insurance," to follow im-
mediately after Section 486 486-1 thereof, and to read as follows :

486 1. 486-2.

(a)     Whenever in connection with the making of a ANY real estate
purchase money mortgage loan upon a 1, 2, 3, or 4 family dwelling
house for a term exceeding 2 years, the mortgagee requires the
issuance of a a mortgagee policy of title insurance, the company is-

suing the policy of title insurance and or the title attorney con-

ducting the settlement shall prior to the disbursement of the mort-
'

gage funds cause the mortgagor to be advised in writing of the fact
TRANSACTION INVOLVING LAND SITUATED AND LYING IN
THIS STATE ANY TITLE INSURANCE COMPANY SHALL IS-
SUE A POLICY INSURING THE TITLE TO SUCH PROPERTY
FOR THE BENEFIT OF ANY MORTGAGEE, SUCH TITLE IN-
SURANCE COMPANY SHALL NOTIFY THE MORTGAGOR, OR
CAUSE SUCH MORTGAGOR TO BE NOTIFIED BY ITS AGENT,
EMPLOYEE OR APPROVED ATTORNEY that a mortgagee title
insurance policy is to be issued, the name or names of the insured
under said policy, and of the face amount of such policy. Such notice
shall also advise the mortgagor of his right and opportunity to obtain

title insurance in his own favor if the same has not already been

ordered or obtained AND THE ADDITIONAL PREMIUM THAT
WILL BE REQUIRED FOR THE PURCHASE OF THE SAME,.
ANY NOTICE SHALL BE IN WRITING AND SHALL BE DE-
LIVERED PRIOR TO THE DISBURSEMENT OF THE MORT-
GAGE FUNDS.

(b)    At or before the closing of the mortgage loan transaction
the THE company issuing the title insurance and the title attorney

conducting the settlement PRIOR TO THE DISBURSEMENT OF
THE MORTGAGE FUNDS THE TITLE INSURANCE COMPANY,
ITS AGENT, EMPLOYEE OR APPROVED ATTORNEY shall ob-
tain from the mortgagor a statement in writing that he has received
the notice required under subsection (a) of this section.

486-2.

If the company issuing the mortgagee policy of title insurance
and or the title attorney conducting the settlement shall fail to comply