Although the phone calls have slowed from a tidal wave to a trickle, lenders, county and state officials are still sorting out the nuances as thousands of Marylanders elected to pay their property taxes on a semiannual basis.

On Thursday, Gov. Parris N. Glendening signed into law legislation that flipped the way homeowners pay their property taxes, making semiannual the standard and annual payment an option, starting with the tax year that begins July 1, 2000.

The idea was to lower closing costs in Maryland, which are among the highest in the nation. Lenders can now require a full year's taxes paid in advance at closing. But under the new law, the figure can be cut in half.

However, those with lender escrow accounts took advantage of an existing Maryland law that permitted a change to semiannual payments this year as long as they notified their lender in writing by May 1.

By doing so, those who changed would get a one-time rebate of up to six months of their property tax, since their escrow accounts would now carry a surplus.

Homeowners who didn't notify their lenders can get a rebate in 2000 as semiannual payments become standard and escrow accounts are reanalyzed by lenders.

But even though the semiannual option had been law since 1995, it was seldom used because of confusion over how to apply it.

Columbia National Mortgage Co. in Howard County wrote a letter warning of the consequences of switching to semiannual payments and asked that borrowers acknowledge receipt of the letter.

"We were flooded the first week. They [lenders] didn't know what to do," said Joel Schlanger, deputy director for finance of the Baltimore County office of budget and finance.

"Most lenders didn't want to pay it that way," said Schlanger, whose office received approximately 550 phone calls a day -- triple the normal -- toward the end of April.

"The law was very clear. They [lenders] said, 'We don't want to do this; what do we do?' We said, 'We are going to record any money that you send us. That is your problem. Not our problem. That is your problem with the law, and that is your problem with the taxpayers who entrust their money to you.' "

For Marshall Rudo, who owns a townhouse in Ellicott City, getting the letter from Columbia National after requesting the switch to semiannual was distressing. "It does everything to put the fear in you," Rudo said of the letter.

But Tonda Cissel, a senior vice president for Columbia National, defended the motives behind the letter, while admitting the bank wasn't trying to set up a condition that allows its customers to change to semiannual status.

Yet, there were other concerns. Chief among them was the service charge the jurisdictions were entitled to place on those who changed to an semiannual basis -- what would the dollar cost be -- and did lenders have a right to implement their own service charge.

Other issues that consumers needed to be aware of were:

Income tax consequences for 1999. Current law states that lenders don't have to pay the second half of the property tax until Jan. 1, thus eliminating half of a homeowner's property tax deduction for this tax year. The new law states lenders must make the second payment by Dec. 31.

A reminder to those who made the switch to still check off on their July tax bill the election for semiannual taxes and to make a copy and send their tax bill to their lender.

Will discounts for early payment of property taxes still be in effect?

"There was a fair amount of confusion on this issue since the end of the General Assembly session," said Ronald Wineholt, director of the state Department of Assessments and Taxation.

"Property owners need to understand in the year of transition from annual payment to semiannual payment they will get back several months' taxes from their escrow account. The exact amount is going to be based on the size of the tax bill and when their taxes are currently paid by their lender."

Wineholt's department estimated that Maryland homeowners would get back an average of $700.

Both current law and the new law signed last week allow counties and municipalities to charge homeowners a service fee for paying taxes on a semiannual basis.

"That service calculation is to represent the lost interest to the county, plus an amount for administrative expense for handling the payments twice," Wineholt said. "My agency has to approve the amount of service charges, and typically they range from 2 to 3 percent [of half the property tax]. The service charge will be shown on the [second] tax bill itself. It will be a line item."

Wineholt also said that any discount allowed by a jurisdiction for early payment would still be in effect, but would affect only the first payment, not the second when the service fee would be applied.

According to Wineholt's department, the fees for 1999 vary from county to county, but after July 1, 2000, the fees will be limited to no more than 1.65 percent of half the property tax. The new law also says it is at a subdivision's discretion whether to charge a fee.

But for 1999, the following jurisdictional fees apply:

Baltimore: 2.64 percent, meaning that if 50 percent of a city homeowner's property tax comes to $1,000, the total service fee will come to $26.40.

Baltimore County: 1.6 percent ($16 per $1,000)

Anne Arundel: 1.84 percent ($18.40 per $1,000)

Carroll County: 1.92 percent ($19.20 per $1,000)

Harford County: 1.95 percent ($19.50 per $1,000)

Howard County: 1.59 percent ($15.90 per $1,000)

Although taxing jurisdictions can collect a fee for administering two payments, lenders servicing existing loans cannot charge a fee, according to Nerry Mitchell, deputy commissioner for the state department of financial regulation.

"We have already decided in this office that we don't believe that federal or state law [allows] the lender or the servicer to increase the cost if there's any disclosure by a mortgage company or an actual charge by a mortgage company that they will be charging anything extra for this particular service, then we would want to know about it."

According to Alan Ingraham, vice president of MNC Mortgage Inc. and treasurer of the Greater Baltimore Board of Realtors, the reason lenders can't charge an additional fee on an existing loan is because a one-time "tax service fee" already had been paid by the borrower at settlement. The fee is to cover the lender's costs during the life of the loan of sending taxes to jurisdictions.

But new loans and refinancings may be subject to higher tax service fees.

Ingraham says his company now charges $85 at settlement, but doesn't foresee drastic increases in such fees. "The likelihood of an imminent increase in that is remote."