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LAWS OF MARYLAND

[Ch. 49

THE LOAN USED IN DETERMINING THE RATE OF INTEREST IS THE
FACE AMOUNT OF THE LOAN LESS THE FEE OR CHARGE.

REVISOR'S NOTE: This section presently appears as
Art. 49, §2(b).

The word "charged" is substituted for the more
ambiguous "assessed" since all interest is
assessed at the inception of the loan, whether
or not then charged. A reference to §§ 12—102
and 12—103 is added to clarify the
applicability of this section to the rates
permitted fay the referenced sections; in this
regard, see revisor's note to §12—102.

The words "at or before" are substituted for
"at," for purposes of clarity.

The only other changes are in style.

12-108. POINTS PROHIBITED.

EXCEPT FOR A LOAN DESCRIBED IN §12-103(D) OR (E) OF
THIS SUBTITLE, A LENDER MAY NOT CHARGE A BORROWER OR ANY
OTHER PERSON ANY POINT OR FRACTION OF A POINT.

REVISOR'S NOTE: This section is new language derived
without substantive change from Art. 19,
§2(a). Its language is simplified by reliance
on the definition of "point" in §12—101. In
this regard, see revisor's note to §12—101(h).

12-109. INTEREST ON ESCROW ACCOUNTS.

(A)   DEFINITIONS.

(1)    IN THIS SECTION THE FOLLOWING WORDS HAVE
THE MEANINGS INDICATED.

(2)    "LENDING INSTITUTION" MEANS A BANK,
SAVINGS BANK, OR SAVINGS AND LOAN ASSOCIATION[[, OR
BUILDING AND LOAN ASSOCIATION]] DOING BUSINESS IN
MARYLAND.

(3)    "ESCROW ACCOUNT" MEANS AN EXPENSE OR
ESCROW ACCOUNT WHICH TENDS TO PROTECT THE SECURITY OF     A
LOAN BY THE ACCUMULATION OF FUNDS FOR THE PAYMENT OF
TAXES, INSURANCE PREMIUMS, OR OTHER EXPENSES.

(B)   INTEREST TO BE PAID ON ESCROW FUNDS.

(1) AFTER MAY 3 1, 1974, A LENDING
INSTITUTION WHICH LENDS MONEY SECURED BY A FIRST MORTGAGE
OR FIRST DEED OF TRUST ON ANY INTEREST IN RESIDENTIAL