Currently, the following verbiage appears above the borrowers' signature in Maryland's first-lien notes:

THIS LOAN TRANSACTION IS GOVERNED BY TITLE 12, SUBTITLE 10 OF THE COMMERCIAL LAW ARTICLE OF THE ANNOTATED CODE OF MARYLAND.

Beginning March 15, 2006, the above verbiage will appear on all second-lien notes where the loan is made for a personal, household or family purpose and secured by owner-occupied real property. The Legal/Compliance Department at Document Systems, Inc. has made this decision based on the fact that most knowledgeable lenders making loans in Maryland elect to originate loans under Subtitle 10 (the Closed End Credit Provisions) instead of the more restrictive Maryland Secondary Mortgage Loan Law, MD COML §§ 12-401 et seq.

Among other restrictions under the Secondary Mortgage Loan Law, late charges are limited to the greater of $2 or 5% of the amount of any delinquent or late installment whereas the Closed End Credit Provisions contain no limitation on amount, and the allowable frequency of refinancings is limited to no more than once during any 12-month period of the loan and twice during any 5-year period of the loan. There are also more restrictions on the fees and charges that can be collected on a loan, such as with regard to loan origination fees, as compared with the Closed End Credit Provisions.

We want to know if you do or do not want the above verbiage added to the Maryland second-lien notes and why. Please share your thoughts with us by emailing compliance@docmagic.com.