Ch. 693

LAWS OF MARYLAND

(D) (1) IN THIS SUBSECTION, "PROPERTY INSURANCE COVERAGE"
MEANS PROPERTY INSURANCE AGAINST LOSSES CAUSED BY PERILS THAT
COMMONLY ARE COVERED IN INSURANCE POLICIES DESCRIBED WITH TERMS
SIMILAR TO "STANDARD FIRE" OR "STANDARD FIRE WITH EXTENDED
COVERAGE".

(2) (I) A LENDER MAY NOT REQUIRE A BORROWER, UNDER AS
A CONDITION TO RECEIVING OR MAINTAINING A LOAN SECURED BY A FIRST
MORTGAGE OR FIRST DEED OF TRUST, TO PROVIDE OR PURCHASE PROPERTY
INSURANCE COVERAGE AGAINST RISKS TO ANY IMPROVEMENTS ON ANY REAL
PROPERTY IN AN AMOUNT EXCEEDING THE REPLACEMENT VALUE OF
IMPROVEMENTS ON THE REAL PROPERTY.

(II) THE REPLACEMENT VALUE OF THE IMPROVEMENTS
ON THE REAL PROPERTY SUBJECT TO THIS SUBSECTION SHALL BE
DETERMINED BY THE INSURER SELECTED BY THE BORROWER TO PROVIDE THE
PROPERTY INSURANCE. IN DETERMINING THE REPLACEMENT VALUE OF THE
IMPROVEMENTS ON ANY REAL PROPERTY, THE LENDER MAY:

1.  ACCEPT THE VALUE PLACED ON THE
IMPROVEMENTS BY THE INSURER; OR

2.  USE THE VALUE PLACED ON THE
IMPROVEMENTS THAT IS DETERMINED BY THE LENDER'S APPRAISAL OF THE
REAL PROPERTY.

(2) (3) A VIOLATION OF THIS SUBSECTION OR OF
SUBSECTION (B)(1) OF THIS SECTION SHALL ENTITLE THE BORROWER TO:

(I)  SEEK AN INJUNCTION TO PROHIBIT THE LENDER
WHO HAS ENGAGED OR IS ENGAGING IN THE VIOLATION FROM CONTINUING
OR ENGAGING IN THE VIOLATION;

(II)  REASONABLE ATTORNEY'S FEES; AND

(III)  DAMAGES DIRECTLY RESULTING FROM THE
VIOLATION.

(3) (4) A VIOLATION OF THIS SUBSECTION OR OF
SUBSECTION (B)(1) OF THIS SECTION DOES NOT AFFECT THE VALIDITY OF
THE FIRST MORTGAGE OR FIRST DEED OF TRUST SECURING THE LOAN.

[(d)] (E) Under this subtitle, insurance may be obtained
only:

(1)  From an insurance company qualified to do
business in the State; and

(2)  At rates not exceeding those approved by the
Insurance Division of the Department of Licensing and Regulation.

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