1188

LAWS OF MARYLAND

Ch. 285

Article - Commercial Law

12-103.

(b) (1) A lender may charge interest at any effective rate
of simple interest on the unpaid principal balance of a loan if:

(i) There is a written agreement signed by the
borrower which sets forth the stated rate of interest charged by
the lender;

(ii) The loan is secured by a first mortgage or
first deed of trust on any interest in residential real property;

(iii) There is no prepayment penalty in
connection with the loan;

(iv) The loan is made and the mortgage or deed
of trust is executed after the effective date of this section;
AND

[(v) The loan is not a renewal of a loan which
was made by the lender to the borrower before the effective date
of this section and which was secured by a mortgage or deed of
trust on the same property; and

(vi) The lender did not issue before the
effective date of this section, a written commitment agreeing to
make the loan at a rate of interest of 10 percent or less.

(2)  For purposes of paragraph (l)(vi) of this
subsection:

(i) "Written commitment" includes any written
commitment, written offer to lend, or other written statement
issued by a lender which reasonably can be construed to be an
offer to make the loan; and

(ii) A written commitment issued    before the

effective date of this section, to make a loan at an  unspecified

rate of interest is a commitment to make the loan at     a rate of
interest of 10 percent or less.

(3)  For the purpose of paragraph (l)(v) of this
subsection, a refinancing by which the borrower elects to
increase the balance due on an existing loan is not a renewal of

the loan.]

(V) THE LOAN IS NOT A REFINANCING OF A LOAN
SECURED BY A FIRST MORTGAGE OR FIRST DEED OF TRUST ON ANY
INTEREST IN RESIDENTIAL REAL PROPERTY UNLESS THE LENDER IS A
BANKING INSTITUTION, A NATIONAL BANKING ASSOCIATION, A FEDERAL
SAVINGS BANK, A FEDERAL OR STATE SAVINGS AND LOAN ASSOCIATION, OR
A FEDERAL OR STATE CREDIT UNION.: