If you originate loans in Maryland, you may have noticed that we have modified our Maryland security instruments to indicate, when applicable, that the property securing repayment of the promissory note is the borrower's principal dwelling.  By way of background, recording fees in the applicable Circuit Courts in Maryland are based in part on number of pages.  Generally speaking, for documents of nine (9) pages or less, the recording fee is $20; for documents of 10 pages or more, the recording fee is $75.  There is an additional $20 surcharge for most instruments recorded in the land records, such as security instruments.  Thus, the aggregate recording fee is $40 for a security instrument of nine (9) pages or less, and $95 for a security instrument of 10 pages or more.  As you can see, the difference in recording fees is significant.  If, however, the document presented for recordation involves solely a principal residence, then the recording fee is $40 without regard to the number of pages recorded. 

Now, for the sake of argument, one can often easily discern the residency status of a property by looking at the types of riders attached to a security instrument.  For example, the property referenced in a security instrument with a second home rider or a 1- 4 family rider attached is not, by definition, a principal residence.  But to be fair, in many instances, the status of the property as a principal residence is not always evident on the face, or in the body of, the security instrument unless a clear and conspicuous reference to that fact is placed on the security instrument itself.  Accordingly, to save our customers the trouble of having to notate manually the security instrument to indicate that the property secured thereby is a principal residence, and ultimately to ensure that borrowers obtain the real cost savings of reduced recording fees, we have modified our Maryland security instruments as follows: if the DocMagic worksheet indicates that the property is owner-occupied and is not either a second home, a 1-4 family dwelling, a multifamily dwelling, a commercial property or undeveloped land, then the following language will automatically populate above the document heading: "The Property is the Borrower's principal residence."

Thanks go out to Matt Grams at http://www.usrecordings.com/ for suggesting this change.  Please contact the DocMagic Compliance Department if you have any questions or comments regarding the contents of this article.