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1581
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HARRY HUGHES, Governor
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(2) WHEN A LOAN OBTAINED BY A BORROWER IS NOT SUBJECT
TO RESTRICTIONS IMPOSED BY LAW ON THE MAXIMUM AMOUNT OF A FINANCE
CHARGE AND INTEREST, ANY PERSON WHO WILLFULLY REQUIRES A BORROWER
TO MAKE A FALSE OR MISLEADING STATEMENT IN VIOLATION OF
SUBSECTION (A) OF THIS SECTION, OR WHO WILLFULLY PROCURES SUCH
STATEMENT, KNOWING THAT IT IS FALSE OR MISLEADING, SHALL FORFEIT
THE FINANCE CHARGE OR INTEREST, BROKERAGE FEES, POINTS, OR ANY
OTHER CHARGES OR FEES IN ADDITION TO ANY OTHER PENALTY OTHERWISE
PROVIDED IN THIS TITLE.
(3) THIS SECTION MAY NOT AFFECT THE REBUTTABLE
PRESUMPTION THAT THE LOAN WAS MADE FOR COMMERCIAL PURPOSES.
12-401.
(I) (3) IF A COMMERCIAL LOAN IS MADE IN THE NAME OF AN
INDIVIDUAL, SECURED BY RESIDENTIAL REAL PROPERTY AND NOT TO A
BUSINESS OR COMMERCIAL ORGANIZATION, THE LENDER OR BROKER, AS
DEFINED BY THE PROVISIONS OF § 12-108 OF THE COMMERCIAL LAW
12-501 OF THE FINANCIAL INSTITUTIONS ARTICLE, SHALL DOCUMENT
INDEPENDENT EVIDENCE THAT THE BORROWER IS SEEKING FUNDS FOR A
LEGITIMATE COMMERCIAL ENTERPRISE BEFORE THE LENDER OR BROKER
GRANTS ANY LOAN FOR THAT PURPOSE. AN AFFIDAVIT IS NOT BY ITSELF
EVIDENCE OF A COMMERCIAL LOAN. HOWEVER, IF THE BORROWER IS
SEEKING FUNDS TO START A BUSINESS AND HAS NOT YET INCORPORATED OR
PREPARED DOCUMENTATION OF PROOF OF OWNERSHIP OF A COMMERCIAL
ENTERPRISE, AN AFFIDAVIT BY ITSELF IS SUFFICIENT IF IT STATES THE
PURPOSE FOR WHICH THE PROCEEDS ARE TO BE USED AND THE NATURE OF
THE BUSINESS CONDUCTED BY THE BORROWER.
12-407.1.
(A) THE COMMISSIONER SHALL DEVELOP AND PREPARE A FORM THAT
EACH LENDER SHALL FURNISH TO AN APPLICANT FOR A SECONDARY
MORTGAGE LOAN. THE FORM SHALL STATE THE FOLLOWING:
(1) THE PURPOSE FOR WHICH THE LOAN IS TO BE USED.
(2) A DISCLOSURE THAT, IF THE LOAN IS FOR A
COMMERCIAL PURPOSE, THE BORROWER SHALL FORFEIT CERTAIN RIGHTS.
(B) THE FORM SHALL STATE THAT THE FORFEITURE OF RIGHTS
INCLUDES:
(1) THE BORROWER'S RIGHT TO PAY A LOAN ORIGINATION
FEE NOT EXCEEDING THE GREATER OF $250 OR 2 PERCENT OF THE LOAN;
AND
(2) THE BORROWER'S RIGHT NOT TO PAY ANY OTHER
COMMISSION, FINDER'S FEES, OR POINTS FOR OBTAINING, PROCURING, OR
PLACING A LOAN.
(3) THE BORROWER'S RIGHT NOT TO PAY AN INTEREST RATE
GREATER THAN 24 PERCENT.
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