When it comes to borrowing money from a consumer lender in Baltimore County, there are certain restrictions that must be taken into account. A consumer lender is a company that grants any loan or advance of money or credit under the Maryland Consumer Loan Act. This type of lender is exempt from installment loan licensing provisions, as outlined in the Maryland Act, Articles 12-103 (a) (or (c) (Interest and Usury), 12-901 and following, and 12-1001 and following. Homebuyers who have “liquid assets” equivalent to at least 20% of the purchase price of the property may not be eligible to use the Maryland Mortgage Program.
Liquid assets can include gifts in the form of cash or equity. Additionally, forbearance agreements are agreements in which the borrower accepts certain conditions and, in return, the lender agrees to refrain from enforcing its rights under the loan documents. In some cases, lenders may require owners of a borrower's business to grant them a lien on the home and personal guarantees. This is often seen in commercial hard money loans, which often include declaratory clauses.
If the borrower cannot finish the project quickly, the lender can easily obtain a judgment against the company and the guarantors and, at the same time, foreclose on the property. It is important to note that all conditions must be detailed in loan documents to avoid confusion should the loan go into default. This is especially true for raffles for construction work at specific intervals during the life of the project.
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