Drew v. First Guaranty Mortgage Corp., 379 Md. 318

Summary

The Maryland Court of Appeals answered a certified question concerning whether Maryland's Secondary Mortgage Loan Law requires a lender to disclose in writing a borrower's statutory right to postpone a balloon payment for up to six months. The court held that the statute does not require written disclosure of that postponement right and therefore did not reach whether the statute's penalty provisions applied.

Holdings

1. Section 12-404(c)(2)(iii) does not require a seller or lender whose residential secondary mortgage creates a balloon payment to state in writing that the statutory one-time, six-month postponement period is available to the borrower.
2. The court did not decide whether the penalty provisions of § 12-413 apply.

Questions Presented

1. Whether Maryland Commercial Law Article § 12-404(c)(2) requires a lender or seller using a secondary mortgage or deed of trust with a residential balloon payment to state in writing that the borrower has a statutory right to postpone the balloon payment once for up to six months.
2. Whether the penalty provisions of § 12-413 apply if the written-disclosure requirement applies.

Disposition

other