Maryland Code, COMMERCIAL LAW 12-1022
Terms Used In Maryland Code, COMMERCIAL LAW 12-1022
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Grantor: The person who establishes a trust and places property into it.
- including: means includes or including by way of illustration and not by way of limitation. See
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- Variable Rate: Having a "variable" rate means that the APR changes from time to time based on fluctuations in an external rate, normally the Prime Rate. This external rate is known as the "index." If the index changes, the variable rate normally changes. Also see Fixed Rate.
(2) “Borrower” means a consumer borrower who makes an application for a loan secured by a first mortgage or first deed of trust on residential real property to be occupied by the borrower as the borrower’s primary residence.
(3) “Commitment” means a written, specific, binding agreement between a borrower and a lender which sets forth the terms of a loan being extended to the borrower.
(4) “Financing agreement” means a written agreement between a borrower and a lender which sets forth the terms of a purchase money loan or a refinancing of an existing loan that:
(i) Results in or is secured by a first mortgage or a first deed of trust on residential real property to be occupied by the borrower; and
(ii) Is offered or extended to the borrower.
(5) (i) “Lender” means a credit grantor subject to the licensing requirements of Title 11, Subtitle 5 of the Financial Institutions Article.
(ii) “Lender” does not include a credit grantor exempt from licensing under § 11-502 of the Financial Institutions Article.
(6) (i) “Loan application” means any oral or written request for an extension of credit that is made in accordance with procedures established by a lender for the purpose of inducing the lender to seek to procure or make a mortgage loan.
(ii) “Loan application” does not include the use of an account or line of credit to obtain a loan within a previously established credit limit.
(b) (1) A lender who offers to make or procure a loan secured by a first mortgage or first deed of trust on residential real property to be occupied by the borrower shall provide the borrower with a financing agreement executed by the lender within 10 business days after the date the loan application is completed.
(2) The financing agreement shall provide:
(i) The term and principal amount of the loan;
(ii) An explanation of the type of mortgage loan being offered;
(iii) The rate of interest that will apply to the loan and, if the rate is subject to change or is a variable rate or is subject to final determination at a future date based on some objective standard, a specific statement of those facts;
(iv) The points, if any, to be paid by the borrower or the seller, or both; and
(v) The term during which the financing agreement remains in effect.
(3) If all the provisions of the financing agreement are not subject to future determination, change, or alteration during its term, the financing agreement shall constitute the final binding agreement between the parties as to the items covered by the financing agreement.
(4) A disclosure provided by a lender to a borrower in compliance with 12 C.F.R. § 1026.37 shall satisfy the requirements of this subsection.
(c) (1) If any of the provisions of the financing agreement are subject to change or determination after its execution, the lender shall provide the borrower with a commitment, executed by the lender, at least 72 hours before the time of settlement agreed to by the parties, providing:
(i) The effective fixed interest rate or initial interest rate that will be applied to the loan; and
(ii) A restatement of all the remaining unchanged provisions of the financing agreement.
(2) Subsequent to execution of the financing agreement, the borrower may waive in writing the 72-hour advance presentation requirement and accept the commitment at settlement only if compliance with the 72-hour requirement is shown by the lender to be infeasible.
(3) A disclosure provided by a lender to a borrower in compliance with 12 C.F.R. § 1026.38 shall satisfy the requirements of this subsection.
(d) If a lender fails to comply with the requirements of this section, the lender shall be subject to the penalties set forth in § 11-523 of the Financial Institutions Article.
(e) (1) A borrower aggrieved by any violation of this section shall be entitled to bring a civil suit for damages, including reasonable attorney’s fees, against the lender.
(2) The penalties set out under § 12-1018 of this subtitle do not apply to any violation of this section.
(f) This section may not be construed to exempt a lender from the provisions of §§ 12-1027 and 12-1028 of this subtitle.