1576

LAWS OF MARYLAND

Ch. 115

(i) (1) "Secondary mortgage loan" means a loan or deferred
purchase price secured in whole or in part by a mortgage, deed of
trust, security agreement, or other lien on real property located
in the State, which property:

(i) Is subject to the lien of one or more prior
encumbrances, except a ground rent or other leasehold interest;
and

(ii) Has a dwelling on it designed principally
as a residence with accommodations for not more than four
families.

(2)  "Secondary mortgage loan" does not include:

(i) A loan to any corporation unless the lender
required the borrower to incorporate as a condition for obtaining
the loan; or

(ii) A commercial loan of more than [$5,000]
$75,000 $50,000 $75,000, as defined in § 12-101(c) of this
article.

(3)  If a commercial loan OF $75,000 $50,000 $75,000
OR LESS is made in the name of an individual, secured by
OWNER-OCCUPIED residential real property and not to a business or
commercial organization, the lender or broker, as defined by the
provisions of § 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.

12-404.

(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 lender, including a seller who takes a mortgage
or deed of trust to secure payment of all or a portion of the
purchase price of a residence sold to a borrower, may make a loan
for the purpose of aiding the borrower in the sale of the
borrower's residence or the purchase of a new residence, and may
create a balloon payment at maturity of this loan if the balloon
payment is: