3872

LAWS OF MARYLAND

Ch. 753

PART OF THE UNPAID PRINCIPAL BALANCE THAT IS MORE THAN
$1,000;

(II) FOR ANY LOAN WITH AN ORIGINAL
PRINCIPAL BALANCE OF MORE THAN $2,000, THE MAXIMUM RATE OF
INTEREST IS 2 PERCENT PER MONTH ON THE UNPAID PRINCIPAL
BALANCE OF THE LOAN.

(7) A LOAN MAY BE MADE PURSUANT TO SUBSECTION
(6) PROVIDED THAT:

(I) IF THE LOAN IS A RENEWAL OR
REFINANCING OF A LOAN MADE PRIOR TO JULY 1, 1982, THE LENDER
COMPLIES WITH SECTION 12-116 OF THIS TITLE;

(II) IF THE LOAN INCLUDES A PROVISION FOR
A RATE OF INTEREST WHICH MAY BE ADJUSTED BY THE LENDER
DURING THE TERM OF THE LOAN, THE LENDER COMPLIES WITH
SECTION 12-118 OF THIS TITLE;

(III) UPON THE BORROWER'S DEFAULT, IF THE
LOAN IS SECURED BY PERSONAL PROPERTY, THE LENDER COMPLIES
WITH SECTION 12-115 OF THIS TITLE CONCERNING REPOSSESSION
AND REDEMPTION OF THE GOODS SECURING THE LOAN; AND

(IV) THE LOAN DOES NOT INCLUDE A BALLOON
PAYMENT, UNLESS PAYMENT IN FULL IS DUE ON DEMAND OR IN 1
YEAR OR LESS.

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