Brown
Brown v. Investors Mortgage Co.
Opinion
Lead Opinion
Plaintiff Catherine Brown borrowed $28,-800 on her home. She fell behind in her payments. The lender initiated foreclosure proceedings.
To prevent foreclosure, Brown borrowed another $50,000 on her home from defendant CLS Mortgage, Inc. The debt carried 16% interest, required monthly payments of $666.67 for three years, and was then payable in full. The maximum interest permitted by state usury law was 12.22%. Brown again fell behind, and CLS commenced foreclosure.
To pay off the CLS loan, Brown borrowed $74,000 from defendant Investors Mortgage Company (IMC). The debt earned interest of 15%, exceeding the existing 12% limit under state law. Brown defaulted. IMC commenced nonjudicial foreclosure. Brown filed for bankruptcy and sued the lenders and others to invalidate the loans, alleging violations of state usury law and the Washington Consumer Protection Act. Defendants moved for summary judgment. The bankruptcy court ordered dismissal. The district court affirmed.
I.
The lenders argue Washington’s usury statute has been preempted by the Depository Institutions Deregulation and Monetary Control Act (DIDMCA) of 1980.