SPIRO T. AGNEW, Governor                          789

61.

(a)  A licensee LENDER may make a secondary mortgage loan in
such an amount that the net proceeds thereof shall equal a predeter-
mined sum, and may take interest in advance upon the full amount of
such loan for the period from the making of the loan to the date of
maturity of the final installment. The total interest, however, shall
not exceed the amount that would accrue throughout the term of the
loan, if charged at the rate of twelve per cent per annum at the end
of each installment period upon the descending balance. The sec-
ondary mortgage loan between the borrower and lender shall be
amortized in equal or substantially equal monthly installments with-
out a balloon payment at maturity. , EXCEPT THAT PAYMENT
ON SUCH A LOAN MAY BE REDUCED OR SUSPENDED
UNTIL THE FIRST LIEN OR ENCUMBRANCE IS WHOLLY
OR PARTIALLY SATISFIED.

(b)  A licensee LENDER may collect from the borrower a delin-
quent or late charge of two dollars ($2.00) or one-twentieth (1/20) of
the amount of any periodical installment whichever is greater; pro-
vided, however, that such delinquent or late charge shall not be
imposed more than once from the same delinquency and provided
that said delinquency shall have continued for at least ten days.
SUCH DELINQUENCY CHARGE SHALL BE DEDUCTED FROM
THE NEXT INSTALLMENT PAYMENT MADE BY THE BOR-
ROWER TO THE LENDER.

62.

(a) The following is hereby fixed as the schedule of maximum
amounts which may be charged to an applicant for a secondary
mortgage loan for costs, fees, services, point and premiums which
may be incurred by such applicant and no other charges of what-
ever nature shall be made in connection with a secondary mortgage
loan:

(1)  A loan origination fee of no greater than two per cent (2%)
of the net proceeds of the loan. , or

(2)   The premiums actually paid for insuring real property secur-
ing the loan or for insuring the life of the party or parties obligated
on the loan, in an amount not to exceed the gross amount of the
contract; provided that at no time shall contracts of life insurance
be outstanding for more than the original amount of the contract;
provided further that any such insurance hereinabove described is
obtained from an insurance company authorized by the State Insur-
ance Department of Maryland to conduct business in this State and at

rates which do not exceed those lawfully or acceptably filed by such

insurance companies with the Insurance Department of Maryland;
and is in an amount not to exceed the reasonable value of the real
property insured; and is of the type of coverage which bears a
reasonable relation to the existing hazard or risk of loss, and pro-
vided finally that the borrower shall not be compelled to purchase
from the licensee fire, life, or title insurance in connection with a
secondary mortgage loan, however, this shall not be construed as
prohibiting the lender from requiring any of the aforementioned
insurance.