Section 12-407.1 - Form for secondary mortgage loan; required statements; charges permissible under § 12-404.1; compliance with § 12-401(i)(3).
§ 12-407.1. Form for secondary mortgage loan; required statements; charges permissible under § 12-404.1; compliance with § 12-401(i)(3).
(a) Commissioner to develop form.- 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) Required explanation of forfeiture of rights.- The form shall state that the forfeiture of rights includes:
(1) The borrower's right to pay a loan origination fee that, when combined with any finder's fee imposed by a mortgage broker under § 12-804 of this title, does not exceed the greater of:
(i) $500 or 10 percent of the net proceeds of a commercial loan of $75,000 or less made under this subtitle; or
(ii) $250 or 10 percent of the net proceeds of any other loan made under this subtitle;
(2) The borrower's right not to pay any other commission, finder's fees, or points for obtaining, procuring, or placing a loan; and
(3) The borrower's right not to pay an interest rate greater than 24 percent.
(c) Charges permissible under § 12-404.1 not prohibited.- This section does not prevent a lender from imposing fees, discounts, points, or other charges whenever permitted under § 12-404.1 of this subtitle concerning mortgage loan programs of state and federal agencies.
(d) Compliance with § 12-401(i)(3) not preempted.- Compliance with the provisions of this section does not relieve the lender or mortgage broker from the provisions of § 12-401(i)(3) of this subtitle.
[1983, ch. 513; 1984, ch. 255; 1985, ch. 115; 1999, ch. 34, § 1; 2005, ch. 25, § 13.]