MARVIN MANDEL, Governor

831

(1975 Volume and 1975 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That Sections 12-402(a) and 12-404(c) of
Article — Commercial Law, of the Annotated Code of
Maryland (1975 Volume and 1975 Supplement) be and they
are hereby repealed and reenacted, with amendments, to
read as follows:

Article — Commercial Law

12-402.

(a) A person may NOT make [loans] A LOAN under
this subtitle [in the regular course of business only if]
UNLESS he is licensed under or exempt from the licensing
requirements of the Maryland Secondary Mortgage Loan
Law—Licensing Provisions.

REVISOR'S NOTE: This subsection is amended to
delete the phrase "in the regular
course of business" so as to
conform to the like change made by
Chapter 574, Acts of 1975, in
Article 66, §41.

12-404.

(c) A loan shall be amortized in equal or
substantially equal monthly installments without a
balloon payment at maturity, except that:

(1)    Payment on the loan may be reduced or
suspended until all prior liens or encumbrances are
wholly or partially satisfied; and

(2)    [A balloon payment at maturity may be
required if the loan is transacted solely for the purpose
of acquiring or carrying on a business or commercial
investment and is more than $5,000.

(3)] A person who takes back a deferred
purchase money secondary mortgage to aid in the sale of
his own residence [shall be permitted to] MAY create a
balloon payment at maturity of the deferred purchase
money mortgage, if [such] THE balloon payment is:

(i) Expressly disclosed to the
borrower[, ]; and

(ii) Agreed to by both the borrower and
the lender/seller in writing.

REVISOR'S NOTE: Chapter 574, Acts of 1975, amended
present item (2) of this
subsection to continue to permit a
balloon payment on a loan for a