As of October 1, 2013,Maryland’s automatic Subordination for
Junior Mortgages will take effect. In general this means that a mortgagor or guarantor who refinances in full the unpaid indebtedness secured by a first mortgage or deed of trust encumbering
the residential property at an interest rate lower that that of the current
first mortgage/deed of trust is not required to obtain permission from the
holder of a junior lien.

Under the new Statute (Md. Real Property Code Ann §7-112) a
mortgage or deed of trust on residential property which refinances, in full, a
First Mortgage at an interest rate lower than the First Mortgage will, upon
recording, have the same lien priority over a junior line as the First Mortgage
being refinanced, provided that:

1. The principal amount secured by the Junior Mortgage does not exceed
   150,000.00;
2. The principal amount secured by the refinance mortgage does not exceed the
   unpaid, outstanding principal balance secured by the first mortgage plus
   an amount to pay closing costs not to exceed 5,000.00 and
3. The refinance Mortgage contains 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,Marylandin 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.”

For those of your doing abstracts in Maryland you should be
prepared to see this language in Refinance Deeds of Trusts/Mortgages in the
future.