Marvin Mandel, Governor                       1423

"SECONDARY MORTGAGE LOAN LAW," BE AND IT IS HERE-
BY REPEALED AND RE-ENACTED, WITH AMENDMENTS,
TO READ AS FOLLOWS:

Notwithstanding the other provisions of this article, it shall be

lawful to charge, contract for, and receive any rate or amount of

interest on any loan to any business or commercial organization or to
a person or persons owning or desiring to acquire a business as a sole
proprietor or joint venture, if the loan is transacted solely for the
purpose of carrying on or acquiring a business or commercial invest-
ment, provided that the principal of said loan is in excess of $5,000.
Any loan transacted according to the provisions of this section may
contain what is commonly referred to as a balloon payment at
maturity.

61.

(A)    A LENDER MAY MAKE A SECONDARY MORT-
GAGE LOAN IN SUCH AN AMOUNT THAT THE NET PRO-
CEEDS THEREOF SHALL EQUAL A PREDETERMINED
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 INSTALL-
MENT PERIOD UPON THE DESCENDING BALANCE. THE
SECONDARY MORTGAGE LOAN BETWEEN THE BOR-
ROWER AND LENDER SHALL BE AMORTIZED IN EQUAL
OR SUBSTANTIALLY EQUAL MONTHLY INSTALLMENTS
WITHOUT A BALLOON PAYMENT AT MATURITY, EX-
CEPT THAT PAYMENT ON SUCH A LOAN MAY BE RE-
DUCED OR SUSPENDED UNTIL THE FIRST LIEN OR EN-
CUMBRANCE IS WHOLLY OR PARTIALLY SATISFIED, AND
EXCEPT THAT A BALLOON PAYMENT AT MATURITY
MAY BE CHARGED IF THE LOAN IS TRANSACTED SOLE-
LY FOR THE PURPOSE OF CARRYING ON OR ACQUIR-
ING A BUSINESS OR COMMERCIAL INVESTMENT.

(B)    A LENDER MAY COLLECT FROM THE BORROWER
A DELINQUENT OR LATE CHARGE OF TWO DOLLARS
($2.00) OR ONE-TWENTIETH (1/20) OF THE AMOUNT OF
ANY PERIODICAL INSTALLMENT WHICHEVER IS GREAT-
ER; PROVIDED, 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 PAYMENT
MADE BY THE BORROWER TO THE LENDER.

Sec. 2. And be it further enacted, That this Act shall take effect
July 1, 1972.

Approved May 26, 1972.

7.