3538

LAWS OF MARYLAND

Ch. 609

Article - Commercial Law
Section 12-404(b) and 12-405
Annotated Code of Maryland
(1975 Volume and 1981 Supplement)

BY adding to

Article - Commercial Law
Section 12-404.1 and 12-404.2
Annotated Code of Maryland
(1975 Volume and 1981 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That section(s) of the Annotated Code of Maryland
read(s) as follows:

Article - Commercial Law

12-404.

(b) A lender may charge interest at any effective rate
of simple interest [not to exceed 16 percent per annum] on
the principal balance of a loan.

12-404.

(a) A lender may:

(1) Make a loan in such an amount that the net
proceeds of the loan equal a predetermined sum; and

(2) Take interest in advance on the full amount
of the loan for the period from the date the loan is made to
the date of maturity of the final installment.

(b) A lender may charge interest at any effective rate
of simple interest not to exceed 16 percent per annum on the
principal balance of a loan, EXCEPT AS PROVIDED IN
SUBSECTION (D) OF THIS SECTION.

(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 person who takes back a deferred purchase
money secondary mortgage to aid in the sale of his own
residence SELLER OR LENDER MAY MAKE A DEFERRED PURCHASE
MONEY SECONDARY MORTGAGE ON THE SALE OR PURCHASE OF
RESIDENTIAL REAL PROPERTY, AND may create a balloon payment