SPIRO T. AGNEW, Governor                        793

(C)    FOR PREMIUMS AND COSTS NOT RETAINED BY
THE LENDER FOR INSURING OR INDEMNIFYING THE
LENDER AGAINST LOSS OR LIABILITY ON OR IN CON-
NECTION WITH THE LOAN.

(D)    OR FOR INSURING THE LIFE OR HEALTH OF THE
BORROWER ON PREMIUMS AND COSTS NOT RETAINED BY
THE LENDER.

2.

(A)    EXCEPT FOR LOANS MADE UNDER SECTION 7 AND
EXCEPT ON ANY LOAN GUARANTEED OR INSURED BY
FHA, VA OR ANY OTHER INSTRUMENTALITY OF THE FED-
ERAL GOVERNMENT WHERE THE MAXIMUM INTEREST
RATE IS LESS NOT MORE THAN 7%, A CHARGE OR FEE,
COMMONLY CALLED "POINTS" OR MORTGAGE ORIGINA-
TION FEE, AND EXTRACTED BY A LENDER FROM EITHER
THE BORROWER OR ANY OTHER PERSON AS ADDITIONAL
COMPENSATION FOR THE LOAN OF MONEY, IS SPECIFI-
CALLY PROHIBITED UNDER THIS ACT.

(B)    IN THE EVENT THAT CHARGES OR FEES WHICH,
UNDER THIS ARTICLE ARE DEEMED INTEREST, ARE
ASSESSED AT THE INCEPTION OF A CONTRACT OF IN-
DEBTEDNESS, THE RATE OF INTEREST REQUIRED IN
SECTION 10 OF THIS ARTICLE SHALL BE DETERMINED
IN THE SAME MANNER AS IF FEES AND CHARGES HAD
NOT BEEN ASSESSED EXCEPT THAT THE PRINCIPAL
OF THE LOAN USED IN DETERMINING THE RATE OF
INTEREST SHALL BE THE FACE VALUE OF THE LOAN
LESS ANY FEES OR CHARGES WHICH ARE INTEREST.

3.

Interest may be charged at NOT IN EXCESS OF the rate of six
per cent (6%) per annum, simple interest on the unpaid balance,
except that interest may be charged at the rate not in excess of seven
EIGHT per cent (7%) (8%) per annum simple interest on the un-
paid balance under an agreement in writing between the lender and
the borrower. This agreement must set out the annual rate of interest
which is charged, stated in percentage and be a separate instrument
from the contract of indebtedness. The agreement must be signed
prior to the execution of the contract of indebtedness.

4.

(a) Interest based on a rate allowed by this Article shall not
be deemed usurious under any other provision of this Article if:

(1)    For periods of less than one (1) year, interest is calculated
on the premise that there are 360 days in the year and 30 days in
each month, and the number of days may include the date of the
loan and the date due or paid;

(2)    Interest on any periodic payment of principal is computed
to the DUE date due due or date paid whichever is later;

(S) FOR LOANS OTHER THAN LOANS MADE UNDER SEC-
TION 5 OF THIS ARTICLE Interest drop calculations are made on
sums not in excess of multiples of $130.00 $100.00, without regard to