Maryland Code, REAL PROPERTY 7-112
Terms Used In Maryland Code, REAL PROPERTY 7-112
- Contract: A legal written agreement that becomes binding when signed.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Grantor: The person who establishes a trust and places property into it.
- 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
- Lien: A claim against real or personal property in satisfaction of a debt.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgagor: The person who pledges property to a creditor as collateral for a loan and who receives the money.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- state: means :
(1) a state, possession, territory, or commonwealth of the United States; or
(2) the District of Columbia. See
(2) “Escrow costs” means money to pay property taxes, hazard insurance, mortgage insurance, and similar costs associated with real property secured by a refinance mortgage that a lender requires to be collected at closing and held in escrow.
(3) (i) “Junior lien” means a mortgage, deed of trust, or other security instrument that is subordinate in priority to a first mortgage or deed of trust under § 3-203 of this article.
(ii) “Junior lien” does not include:
1. A judgment lien; or
2. A lien filed under the Maryland Contract Lien Act.
(4) “Refinance mortgage” means a mortgage, deed of trust, or other security instrument given to secure the refinancing of indebtedness secured by a first mortgage or deed of trust.
(5) “Residential property” means real property improved by four or fewer single family dwelling units that are designed principally and are intended for human habitation.
(b) This section does not apply to a junior lien securing a loan made by a state or local government agency with a 0% interest rate.
(c) A mortgagor or grantor who refinances in full the unpaid indebtedness secured by a first mortgage or deed of trust encumbering or conveying an interest in residential property at an interest rate lower than provided for in the evidence of indebtedness secured by the first mortgage or deed of trust is not required to obtain permission from the holder of a junior lien if:
(1) The principal amount secured by the junior lien does not exceed $150,000; and
(2) The principal amount secured by the refinance mortgage does not exceed the unpaid outstanding principal balance secured by the first mortgage or deed of trust plus an amount not exceeding $5,000 to pay closing costs and escrow costs.
(d) A refinance mortgage that meets the requirements of subsection (c) of this section shall have, on recordation, the same lien priority as the first mortgage or deed of trust that the refinance mortgage replaces.
(e) A refinance mortgage that meets the requirements of subsection (c) of this section shall include the following statement in bold or capitalized letters: “This is a refinance of a deed of trust/mortgage/other security instrument recorded among the land records of …………… county/city, Maryland in liber no. ……. folio ……., in the original principal amount of …………., and with the unpaid outstanding principal balance of ………….. The interest rate provided for in the evidence of indebtedness secured by this refinance mortgage is lower than the applicable interest rate provided for in the evidence of indebtedness secured by the deed of trust/mortgage/other security instrument being refinanced.”
(f) The priorities among two or more junior liens shall be governed by § 3-203 of this article.
(g) This section may not be construed to preempt or abrogate the operation or effect of, or ability of a court to apply the principles of, equitable subrogation or equitable subordination.