MORTGAGE BROKERS NOT “CREDITORS” UNDER DIDMCA

Linda R. Sweeney brought suit against Savings First Mortgage, L.L.C. (Savings First) in the Circuit Court for Frederick County, alleging a violation of the Maryland Finder’s Fee Law. Md. Code (1975, 2000 Repl. Vol.), §§ 12-801 - 12-809 of the Commercial Law Article.1 Savings First acted as a mortgage broker for Ms. Sweeney in the procurement of two mortgage refinance loans within a one-year period. Ms. Sweeney alleged that the mortgage broker fee charged by Savings First in connection with the second loan was in violation of the Maryland statute, specifically § 12-804(c).2

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1   
All citations in this opinion to the Maryland Code will be to this version of the Commercial Law Article in effect at the time of the operative facts of this case, unless otherwise specified.

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2   
Section 12-804(c) states:
   

Mortgage loan obtained more than once on same property. - A mortgage broker obtaining a mortgage loan with respect to the same property more than once within a 24-month period may charge a finder’s fee only on so much of the loan as is in excess of the initial loan.

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Savings First responded to Ms. Sweeney’s suit by filing a motion to dismiss, or, in the alternative, for summary judgment. In support of its motion, Savings First argued that the Finder’s Fee Law was preempted by § 501(a)(1) of the Federal Depository Institutions Deregulation and Monetary Control Act,3 and, in the alternative, was barred by the applicable Maryland one-year statute of limitations.4 The Circuit Court granted the motion, dismissing Ms. Sweeney’s complaint with prejudice based on its conclusion that § 1735f-7a of Title 12 of the United States Code preempted the Maryland statute. Ms. Sweeney noted an appeal to the Court of Special Appeals. We granted certiorari, Sweeney v. Savings First Mortgage, L.L.C., 385 Md. 511, 869 A.2d 864 (2005), on our initiative while the appeal was pending in the intermediate appellate court, in order to consider the following question of first impression in this State:5

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3   

The Depository Institutions Deregulation and Monetary Control Act is codified at 12 U.S.C. § 1735f-7a (2000).
4   

Md. Code (1975, 2002 Repl. Vol.), § 5-107 of the Courts and Judicial Proceedings Article provides that “[a] prosecution or suit for a fine, penalty, or forfeiture shall be instituted within one year after the offense was committed.”
5   

In considering an appeal on bypass of the intermediate appellate court, this Court considers only those issues that would have been properly before the Court of Special Appeals. Md. Rule 8-131(b)(2). See Converge Servs. Group, LLC v. Curran, 383 Md. 462, 467 n.1, 860 A.2d 871, 874 n.1 (2004).

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Is Maryland’s Finder’s Fee Law, and the limits it places on the fees that mortgage brokers may charge, preempted by the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA)?

Based on our analysis of the federal statute, and an investigation of the legislative history behind the DIDMCA, we hold that the Maryland Finder’s Fee Law is not preempted in this case. Accordingly, we shall reverse the judgment of the Circuit Court for Frederick County and remand this matter for further proceedings.
I.
A.

On 29 August 2000, Savings First acted as a mortgage broker in obtaining a refinance loan for Ms. Sweeney and Harry E. Stockman6 secured by a residence at 9204 Oak Tree Circle in Frederick, Maryland. The amount of the loan was $140,250 and the lender for the transaction was First Union National Bank of Delaware. As payment for its efforts in brokering the loan, Savings First received a mortgage broker fee of $8,427. The following year, on or about 12 July 2001, Savings First arranged a replacement mortgage refinance loan for the same residence for Ms. Sweeney and Mr. Stockman in the amount of $158,400. The lender in this second transaction was Concorde Acceptance Corporation (Concorde). The mortgage broker fee paid to Savings First in the second transaction was $10,788. The mortgage broker fee for each transaction was rolled into the amounts financed.

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6   

Mr. Stockman is not a party to this controversy.

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B.

Ms. Sweeney filed a complaint on 1 March 2004 in the Circuit Court for Frederick County seeking a judgment in the amount of $30,564 against Savings First.7 Ms. Sweeney contended that the maximum fee allowed by Maryland law for Savings First’s brokering of the second loan was $1,452, or 8% of $18,150, the amount of the second loan in excess of the first loan. The relevant portions of § 12-804 of the Maryland Finder’s Fee Law state:

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7   

Section 12-807 states:
   

Any mortgage broker who violates any provision of this subtitle shall forfeit to the borrower the greater of:
(1)   

Three times the amount of the finder’s fee collected; or
(2)   

The sum of $500.

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Fees mortgage broker permitted to charge.
   

(a) Maximum amount of finder’s fee. - A mortgage broker may charge a finder’s fee not in excess of 8 percent of the amount of the loan or advance.
* * * * *

(c) Mortgage loan obtained more than once on same property. - A mortgage broker obtaining a mortgage loan with respect to the same property more than once within a 24-month period may charge a finder’s fee only on so much of the loan as is in excess of the initial loan.

Md. Code, § 12-804.

Savings First filed its motion to dismiss for failure to state a claim, or, in the alternative, for summary judgment, on 14 May 2004. Savings First argued that Ms. Sweeney’s complaint stated no basis for relief because her claim was barred by law for either of two reasons. The first contention was that § 501(a)(1) of the DIDMCA expressly preempts application of the Maryland Finder’s Fee Law. Under this federal statute, a state is prohibited from “expressly limiting the rate or amount of interest, discount points, finance charges, or other charges” applying to qualifying mortgages. 12 U.S.C. § 1735f-7a(a)(1) (2000). Savings First’s alternate argument was that Ms. Sweeney’s claim was barred by the one-year statute of limitations applicable to penalties and forfeitures.8 Savings First included affidavits in support of its motion demonstrating particular facts, beyond those alleged in Ms. Sweeney’s complaint, that it contended were material and not in genuine dispute.

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8   

The Circuit Court held that the applicable statute of limitations was not one year, but did not opine what the correct applicable limitations period was. Savings First initially filed a cross-appeal in the Court of Special Appeals, but has not briefed or argued before us the limitations issue. Thus, we shall not address the statute of limitations question. See Ricker v. Abrams, 263 Md. 509, 516, 283 A.2d 583, 587 (1971) (stating that an issue not raised in the brief(s) or oral argument is waived); see also Md. Rule 8-504.

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At the conclusion of the motions hearing on 18 August 2004, the Circuit Court ostensibly granted the motion to dismiss Ms. Sweeney’s claim, with prejudice, because §1735f-7a preempted the cause of action brought under § 12-804 of the Maryland Commercial Law Article. In ruling on the motion, the Circuit Court did not state whether it had considered the additional facts offered by Savings First in its affidavits.9

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9   

We note also that although the order entered by the court did not specify whether the court was granting Savings First’s motion to dismiss or motion for summary judgment, it was stated at the conclusion of the hearing that summary judgment was being granted. This was the proper procedural action under Maryland Rule 2-322(c). See Dual, Inc. v. Lockheed Martin Corp., 383 Md. 151, 161, 857 A.2d 1095, 1100 (2004) (stating that, when factual allegations are presented beyond those alleged in the complaint, and consideration of same is not excluded expressly by the judge, the facial grant of a motion to dismiss will be treated for purposes of appellate review as the grant of summary judgment).

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