Title: Nationstar Mortgage v. Kemp

State: maryland

Issuer: Maryland Supreme Court

Document:

Nationstar Mortgage LLC d/b/a Mr. Cooper, as Successor by Merger to Nationstar, Inc., 
et. al. v. Donna Kemp 
No. 43, September Term 2020 
 
 
Mortgages – Assignment.  As a general rule, if the person that originates a mortgage loan 
assigns the mortgage loan to another person, the assignee of the loan has the same rights 
and obligations under a deed of trust that secures that loan as the originator of the loan. 
 
Statutes – Statutory Interpretation – Code Revision – Maryland Usury Law.  Code 
revision bills that re-codify existing statutes into new articles of the Maryland Code are not 
intended to change the substance of existing law.  The addition of a definition of “lender” 
to the Maryland Usury Law when that law was re-codified as part of the Commercial Law 
Article was not intended either to change the substance of the Maryland Usury Law or to 
abrogate the common law of assignment, particularly when the code revisors explicitly 
disclaimed any intention to change the law in the report to the General Assembly that 
accompanied the code revision bill. 
 
Maryland Usury Law – Prohibited Fees.  The Maryland Usury Law restricts the 
assessment of an inspection fee against a borrower in connection with the financing of 
residential real property.  Maryland Code, Commercial Law Article, §12-121.  That 
prohibition applies during the life of a mortgage loan and applies to an assignee and a 
servicer of the mortgage loan, as well as to the originator of the loan. 
 
Consumer Finance – Debt Collection – Prohibited Practices.  The Maryland Consumer 
Debt Collection Act, Commercial Law Article, §14-201 et seq., prohibits a debt collector 
from engaging in certain conduct when “collecting or attempting to collect an alleged debt” 
based on a consumer transaction.  Among other things, a debt collector may not “claim … 
to enforce a right with knowledge that the right does not exist.”  That prohibition is not 
limited simply to “methods” of debt collection. 
 
Consumer Finance – Debt Collection – Prohibited Practices – Statement of Cause of 
Action.  The plaintiff’s complaint alleged that the servicer of the plaintiff’s mortgage 
asserted a right to collect property inspection fees from the borrower – fees that are 
prohibited by §12-121 of the Maryland Usury Law – and that the servicer had knowledge 
of that prohibition.  It adequately stated a claim based on a violation of the Maryland 
Consumer Debt Collection Act. 
 
 
Circuit Court for Montgomery County 
Case No. 441428V 
Argument:  March 5, 2021 
IN THE COURT OF APPEALS 
OF MARYLAND 
 
No. 43 
 
September Term, 2020 
 
 
 
NATIONSTAR MORTGAGE LLC D/B/A MR. 
COOPER, ET AL.  
 
V. 
 
DONNA KEMP 
 
_____________________________________ 
 
 
 
 
Barbera, C.J., 
 
 
 
McDonald 
 
 
 
Watts 
 
 
 
Hotten 
 
 
 
Getty 
 
 
 
Booth 
 
 
 
Biran, 
 
 
 
 
   JJ. 
 
______________________________________ 
 
Opinion by McDonald, J. 
Getty, J., dissents. 
______________________________________ 
 
Filed: August 27, 2021   
Pursuant to Maryland Uniform Electronic Legal 
Materials Act 
(§§ 10-1601 et seq. of the State Government Article) this document is authentic. 
 
 
 
 
 
Suzanne C. Johnson, Clerk 
2021-08-27 14:05-04:00
 
A clever man once said that “cauliflower is nothing more than cabbage with a 
college education.”1  It might be said, less cleverly, that code revision in Maryland – the 
process that restates statutes to make them more logical, accessible, and compatible with 
the English language – results in a new law that is nothing more than the old law with a 
college education.  At bottom, this case is about whether a code revision bill did more than 
that. 
 
Some years ago, Respondent/Cross-Petitioner Donna Kemp entered into a mortgage 
loan secured by a deed of trust on her home.  The originator of that loan later assigned it to 
Petitioner/Cross-Respondent Federal National Mortgage Association (“Fannie Mae”), 
which contracted with the predecessor of Petitioner/Cross-Respondent Nationstar 
Mortgage, LLC (“Nationstar”), to service the loan – that is, to do such things as collecting 
and disbursing payments owed by the borrower.  Under longstanding Maryland law 
concerning the assignment of mortgages, Fannie Mae succeeded to the same rights and 
obligations of the original lender. 
 
Ms. Kemp later fell behind on her mortgage payments.  After declaring her to be in 
default, Nationstar assessed Ms. Kemp fees for drive-by inspections of the property.  A 
provision of the Maryland Usury Law prohibits lenders from imposing such fees.  Ms. 
Kemp, Fannie Mae, and Nationstar entered into a loan modification agreement to resolve 
the default, but Ms. Kemp objected to the assessment of the property inspection fees. 
 
1 See Directory of Mark Twain’s maxims, quotations, and various opinions at 
https://perma.cc/5G7U-56ZX.  
2 
 
Nationstar took the position that neither Fannie Mae, the assignee of the loan, nor its agent 
Nationstar, fit within a definition of “lender” that had been added to the Usury Law as part 
of code revision.  Nationstar asserted that it was therefore exempt from the prohibition 
against property inspection fees.  Ms. Kemp disagreed. 
Ms. Kemp filed a complaint in the Circuit Court for Montgomery County and, after 
it was dismissed by the Circuit Court for failure to state a cause of action, pursued this 
appeal.  The primary question in this appeal is whether the addition of a definition of 
“lender” to the Maryland Usury Law during code revision effected a significant change in 
that law – and the Maryland common law – that lay latent for more than four decades before 
this case arose.  
 
We hold that code revision did not change Maryland law applicable to assignees of 
mortgage loans and that the prohibition on property inspection fees applies to Nationstar 
as the agent of Fannie Mae.  We also hold, consistent with the principles announced in the 
Court’s opinion in Chavis v. Blibaum & Associates, P.A.,2 also issued today, that Ms. 
Kemp’s complaint adequately stated a claim under the Maryland Consumer Debt 
Collection Act.  
 
 
 
2 ___ Md. ___ (2021). 
3 
 
I 
Legal Background 
A. 
Financing Residential Real Property 
1. 
Mortgages 
A mortgage is a device for securing a debt with real property.  In a typical residential 
real estate transaction, in which a home buyer finances the purchase of a home through a 
mortgage, the buyer is the mortgagor and the lender is the mortgagee.   
In Maryland, financing of residential real estate is typically accomplished when the 
home buyer executes a note promising to repay the loan to the lender and a deed of trust 
transferring an interest in the property to a trustee to secure that promise.  Although a deed 
of trust may be technically distinct from a common law mortgage, it is common both 
colloquially and in legal parlance to use the term “mortgage” as a shorthand for financing 
that involves a deed of trust.  See Legacy Funding LLC v. Cohn, 396 Md. 511, 513-14 n.1 
(2007).  For convenience, we will use that term on occasion in our opinion in this case, 
which arose from the financing of a home secured by a deed of trust. 
A lender may designate a servicer to act as its agent in administering the mortgage.  
Typically, a servicer collects payments from the mortgagor on the debt and may take other 
actions such as the release of a lien and the payment of property insurance and property 
taxes.  See Black’s Law Dictionary (9th ed. 2009) at 1105 (“mortgage servicing”); see also 
Maryland Code, Financial Institutions Article, §11-501(n); Commercial Law Article, §13-
316.   
 
 
4 
 
2. 
Assignment of Mortgages 
Like other loans, a mortgage may be assigned by the original lender to another 
person or entity.  A security instrument, like a mortgage or deed of trust, follows the debt 
instrument if the debt instrument is sold or negotiated to a different entity – that is, if the 
mortgage loan is assigned.  See Michael J. McKeefery & Richard E. Solomon, Gordon on 
Maryland Foreclosures (5th ed. 2021), ch. 4 & nn.1-2.  Any assignment or sale of a debt 
instrument after the initial transaction is said to take place in a secondary market.3   
Mortgages are one of the oldest forms of secured debt to be assigned and sold in a 
secondary market.  Such a market has existed in England since at least the thirteenth 
century.  Jo Anne Bradner, The Secondary Mortgage Market and State Regulation of Real 
Estate Financing, 36 Emory L.J. 971, 974 (1987).4  Assignments of mortgages were well 
 
3 A “secondary market” is, in general, “any market in which participants deal in 
items which have seen their first sale elsewhere.”  Jo Anne Bradner, The Secondary 
Mortgage Market and State Regulation of Real Estate Financing, 36 Emory L.J. 971, 973 
(1987).  
4 It is important not to confuse the assignment of a mortgage, which is a secondary 
market transaction, with two other, more recent, types of transactions related to finance 
and residential real estate.   
First, many homeowners obtain home equity loans or other forms of “second 
mortgages” on real property that is already subject to a first mortgage or similar prior 
encumbrance, often established in connection with the purchase of the property.  Second 
mortgages are regulated under the Maryland Secondary Mortgage Loan Law, Maryland 
Code, Commercial Law Article, §12-401 et seq.  Despite the title of that law, it concerns 
“second mortgages,” not what has now come to be referred to as the “secondary mortgage 
market.”  See Thompkins v. Mountaineer Investments, LLC, 439 Md. 118, 125 n.4 (2014). 
Second, in recent years, many mortgages that have been assigned have been bundled 
in pools and securitized by financial intermediaries as an investment product.  The lack of 
adequate regulation of that phenomenon in recent decades triggered the Great Recession.  
5 
 
known under the common law in this country.  Indeed, a century ago it was observed that 
“there is scarcely any business transaction that has been more common and familiar … 
than the assignment of mortgages.”  William E. Britton, Assignment of Mortgages Securing 
Negotiable Notes, 10 Ill. L. Rev. 337 (1915) (internal quotation marks and citation 
omitted). 
In Maryland, it has long been understood that a mortgage may be assigned.  Since 
at least 1856, the Maryland Code has provided specific direction on how to draft an 
instrument that assigns a mortgage.  Chapter 154, ch. 4th, §§116, 117, Laws of Maryland 
1856.  That law is currently codified in Maryland Code, Real Property Article (“RP”), §4-
203. 
Under the common law, an assignee generally has the same rights and 
responsibilities as its assignor – no more, no less.  For example, this Court recently stated: 
[T]he rights of an assignee are concomitant to those of an assignor … “An 
unqualified assignment generally operates to transfer to the assignee all of 
the right, title and interest of the assignor in the subject of the assignment and 
does not confer upon the assignee any greater right than the right possessed 
by the assignor.”… [A]ssignees are “bound to the same limitations period as 
their assignor.” 
 
University System of Maryland v. Mooney, 407 Md. 390, 411 (2009) (citing and quoting 
James v. Goldberg, 256 Md. 520, 527 (1970) and Jones v. Hyatt Ins. Agency, Inc., 356 Md. 
639, 653 n.8 (1999)). 
 
See, e.g., Gretchen Morgenson & Joshua Rosner, Reckless Endangerment (2011).  The 
recent trend of securitization at the behest of financial intermediaries is distinct from the 
assignment of a mortgage which, as indicated in the text, has been common for centuries. 
6 
 
The rights and responsibilities of an assignee of a mortgage are no different, as this 
Court has indicated.  See Kemp’s Ex’x v. M’Pherson, 7 H. & J. 320, 336 (1826) (“as a 
general rule no position is better established than that the assignee stands in the shoes of 
the assignor, and takes the claim, subject to all the equity it possessed in [the assignor’s] 
hands”) (emphasis in original); Cumberland Coal & Iron Co. v. Parish, 42 Md. 598, 614 
(1875) (“the assignee takes the mortgage, and the debt secured by it, upon the same terms, 
and subject to the like equities and defences that it was subject to in the hands of the 
assignor”); Farmers’ & Merchants’ National Bank v. Anderson, 152 Md. 641, 645 (1927) 
(same); Ressmeyer v. Norwood, 117 Md. 320, 331-32 (1912) (same); cf. In re Ward, 2008 
WL 508623 (Bankr. D. Md. Feb. 20, 2008) at *1 n.3 (under Maryland law, assignee of 
mortgage “stood in the shoes of [the assignor] with no more and no less rights than its 
assignor”); see also RP §2-103.5  As a general rule, an assignee of a mortgage acquires no 
power with respect to the mortgage that the assignor did not have.  Barrick v. Horner, 78 
Md. 253, 256 (1893) (“no theory can be maintained by which [the assignee of the 
mortgage], by merely succeeding to the rights of the mortgagee, could obtain a power 
which the latter never had”). 
 
5 There is an exception to the general rule for an assignee who is a bona fide 
purchaser for value of a promissory note secured by a mortgage who has no notice of a 
defense or equity of the mortgagor.  That exception has no bearing on this case – as we 
shall see, a statute provides notice to the world.  However, this exception does reinforce 
that the general rule is that an assignee steps into the shoes of the assignor.  See Part III.B.2 
of this opinion below. 
7 
 
Beginning in the 1930s, in response to the Great Depression and in an effort to 
support home ownership, Congress created entities that either insure, guarantee, or 
purchase (i.e., take assignment of) mortgage loans.  Bradner, supra, 36 Emory L. J. at 975-
77.  Pertinent to this case, among those entities was the predecessor of the Federal National 
Mortgage Association, now commonly referred to as FNMA or Fannie Mae, which was 
created to buy and sell home mortgages.  Id. at 975-77 & nn.16-25.6  To facilitate the sale 
and assignment of mortgages, Fannie Mae has developed forms and guidelines for 
mortgages.  
 
3. 
The Maryland Usury Law 
Maryland law has long regulated what a lender may charge a borrower in connection 
with a loan.  The State Constitution establishes a legal rate of interest7 and the General 
Assembly has legislated on the subject since colonial times.8  See generally Scott v. Leary, 
34 Md. 389 (1871) (recapping development of Maryland Usury Law beginning in 1704). 
Once codified in a separate article of the Maryland Code – most recently, former 
Article 49 of the 1957 Code  – the Maryland Usury Law now appears as Subtitle 1 of Title 
 
6 Some decades later, Fannie Mae was authorized to issue securities backed by the 
mortgages that it purchased.  Bradner, supra, 36 Emory L. Rev. at 976 n.26. 
7 Maryland Constitution, Article III, §57 (“The Legal Rate of Interest shall be Six 
per cent. per annum; unless otherwise provided by the General Assembly.”) (punctuation 
and italics in original). 
8 E.g., Chapter 69, §1, Laws of Maryland 1704 at pp. 351-52 (“no person or persons 
whatsoever . . . shall exact or take directly or Indirectly for Loane of any Moneys, Wares, 
or Merchandizes or other Comoditys whatsoever to be paid in money above the value of 
Six pounds for the forebearance of one hundred pounds for one year . . . .”). 
8 
 
12 of the Commercial Law Article (“CL”).  The Usury Law defines “usury” as “the 
charging of interest by a lender in an amount which is greater than that allowed by this 
subtitle.”  CL §12-101(m).  Other sections of the law regulate the amount of interest that 
may be charged.  See, e.g., CL §§12-101(k), 12-102, 12-103.  However, since money is 
fungible and people are creative, efforts to circumvent the restrictions of the Usury Law 
have sometimes taken the form of fees or other charges that were assessed to the borrower.  
In Brenner v. Plitt, 182 Md. 348 (1943),9 this Court rejected one such effort in colorful 
language restated from an earlier case: 
Usury is a moral taint wherever it exists and no subterfuge shall be 
permitted to conceal it from the eye of the law…. “[I]t matters not in what 
part of the transaction it may lurk, or what form it may take … or whether it 
be a pretended sale and lease, or under whatever guise the lender – always 
fruitful in expedients – may attempt to evade the law, Courts of justice, 
disregarding the shadow and looking to the substance, will ascertain what in 
truth was the contract between the parties.” 
 
182 Md. at 356-57 (quoting Andrews v. Poe, 30 Md. 485, 487-88 (1869)). 
Consistent with this Court’s statement in Brenner, the Maryland Usury Law covers 
not only the stated rate of interest, but also, in general, “any compensation” required by a 
lender “directly or indirectly” related to “the extension of credit for the use or forbearance 
of money,” including “any loan fee, origination fee, service and carrying charge, 
investigator’s fee, time-price differential, and any amount payable as a discount ….”  CL 
 
9 It appears from the Court’s recitation of the facts in Brenner that the case involved 
a debt secured by a mortgage that had been assigned, although the precise time and terms 
of that assignment are not apparent from the Court’s opinion. 
9 
 
§12-101(e) (definition of “interest”).  Thus, various provisions of the Maryland Usury Law 
address fees or charges that may be imposed in connection with a loan.   
Fees charged in connection with mortgages on residential real property have been a 
major concern of the General Assembly when addressing amendments to the Maryland 
Usury Law.  In B. F. Saul Co. v. West End Park North, Inc., 250 Md. 707 (1968), this Court 
conducted a detailed analysis of various fees charged in connection with the financing of 
residential real property and the application of the Usury Law to those fees.  The Court 
stated that “[i]n order to divine the legislative intent behind [a provision of the Usury Law], 
it is necessary to consider the primary objective sought to be achieved by the Act, which 
was to provide protection for the home buyer from sharp practices of some lenders.”  250 
Md. at 720.  In analyzing a particular section of the Usury Law, the Court favored the 
“reading of the statute as a whole” rather than focusing solely on the particular section.  Id. 
at 722.  It emphasized that “[i]n ascertaining the intention of the legislature, all parts of a 
statute are to be read together to find the intention as to any one part, and all parts are to be 
reconciled and harmonized if possible.”  Id.  In agreeing with the lower court’s “practical 
and sensible” construction of an imprecise provision of the Usury Law, the Court reiterated 
the “cardinal rule[] of statutory construction … that wherever possible an interpretation 
should be given to the statutory language which will not lead to oppressive, absurd or unjust 
consequences.”  Id. 
 
4. 
CL §12-121 
 
The primary issue in this case concerns the application of CL §12-121, a provision 
of the Maryland Usury Law that restricts the charging of an inspection fee in connection 
10 
 
with the financing of residential real property.  That section, which was originally enacted 
in 1986,10 reads as follows: 
(a) 
In this section, the term “lender’s inspection fee” 
means a fee imposed by a lender to pay for a visual inspection 
of real property. 
 
(b) 
Except as provided in subsection (c) of this 
section, a lender may not impose a lender’s inspection fee in 
connection with a loan secured by residential real property. 
 
(c) A lender’s inspection fee may be charged if the 
inspection is needed to ascertain completion of: 
(1) Construction of a new home; or 
(2) Repairs, alterations, or other work required 
by the lender. 
 
(d) This section does not apply to an appraisal of the 
value of real property by a lender or to fees imposed in 
connection with an appraisal. 
 
The key provision at issue in this case is the proscription in subsection (b) against 
the imposition of a “lender’s  inspection fee” in connection with a mortgage loan.  Since at 
least January 2014, the Maryland Commissioner of Financial Regulation has taken the 
position that mortgage servicers like Nationstar are subject to the prohibition on inspection 
fees in CL §12-121 during the life of a mortgage loan.  Advisory Notice (January 7, 2014), 
available at https://perma.cc/2WYR-S22S. 
B. 
Debt Collection – Maryland Consumer Debt Collection Act 
Also at issue in this appeal is the application of another consumer protection statute 
codified in the Commercial Law Article – the Maryland Consumer Debt Collection Act 
 
10 Chapter 628, Laws of Maryland 1986. 
11 
 
(“MCDCA”).  CL §14-201 et seq.  The MCDCA regulates the conduct of anyone who 
collects – or attempts to collect – a debt arising from a consumer transaction.  A consumer 
transaction is defined as a “transaction involving a person seeking or acquiring real or 
personal property, services, money, or credit for personal, family, or household purposes.”  
CL §14-201(c).  During the period pertinent to this case,11 the statute provided that a “[debt] 
collector may not:” 
(1) Use or threaten force or violence; 
 
(2) Threaten criminal prosecution, unless the transaction involved the 
violation of a criminal statute; 
 
(3) Disclose or threaten to disclose information which affects the 
debtor’s reputation for credit worthiness with knowledge that the information 
is false; 
 
(4) Except as permitted by statute, contact a person’s employer with 
respect to a delinquent indebtedness before obtaining final judgment against 
the debtor; 
 
(5) Except as permitted by statute, disclose or threaten to disclose to 
a person other than the debtor or his spouse or, if the debtor is a minor, his 
parent, information which affects the debtor’s reputation, whether or not for 
credit worthiness, with knowledge that the other person does not have a 
legitimate business need for the information; 
 
(6) Communicate with the debtor or a person related to him with the 
frequency, at the unusual hours, or in any other manner as reasonably can be 
expected to abuse or harass the debtor; 
 
(7) Use obscene or grossly abusive language in communicating with 
the debtor or a person related to him; 
 
 
11 In 2018, the statute was amended to add two additional prohibited practices – 
engaging in unlicensed debt collection activity and violating the federal Fair Debt 
Collection Practices Act.  Chapters 731, 732, Laws of Maryland 2018.  
12 
 
(8) Claim, attempt, or threaten to enforce a right with knowledge that 
the right does not exist; 
 
(9) Use a communication which simulates legal or judicial process or 
gives the appearance of being authorized, issued, or approved by a 
government, governmental agency, or lawyer when it is not. 
 
CL §14-202.  The provision most pertinent to this case is subsection (8) concerning a debt 
collector’s assertion of a right “with knowledge that the right does not exist.”  A debt 
collector who violates the MCDCA is liable for damages caused by the violation.  CL §14-
203.  A violation of the MCDCA is also defined to be an “unfair and deceptive trade 
practice” prohibited by the Maryland Consumer Protection Act.  CL §§13-301(14)(iii), 13-
303.   
II 
Facts and Proceedings 
This case was decided in the Circuit Court on the basis of a motion to dismiss the 
complaint.  In reviewing that ruling, we accept the well-pleaded allegations of the 
complaint as true.  The Second Amended Complaint is the operative pleading for that 
purpose.  We summarize the facts that are alleged in the Second Amended Complaint or 
that otherwise appear to be undisputed.    
A. 
Ms. Kemp’s Mortgage 
1. 
Origination and Assignment of Mortgage 
In April 2007, Ms. Kemp refinanced her home in Glen Burnie and for that purpose 
executed a deed of trust in favor of the lender, Countrywide Home Loans, Inc. 
(“Countrywide”), to secure the mortgage loan she received from Countrywide.  The deed 
13 
 
of trust was drafted and executed on a Fannie Mae form.  The fine print of the 12-page 
form addressed various terms of the deed of trust.  Paragraph 14 of the deed of trust, entitled 
“Loan Charges,” stated: 
Lender may charge Borrower fees for services performed in connection 
with Borrower’s default, for the purpose of protecting Lender’s interest in 
the Property and rights under this Security Instrument, including, but not 
limited to, attorneys’ fees, property inspection and valuation fees. In regard 
to any other fees, the absence of express authority in this Security Instrument 
to charge a specific fee to Borrower shall not be construed as a prohibition 
on the charging of such fee.  Lender may not charge fees that are expressly 
prohibited by this Security Instrument or by Applicable Law. 
 
(emphasis added).  
At some point after execution of the deed of trust, the mortgage loan and the deed 
of trust that secured it were acquired by Fannie Mae.12  The land records for Anne Arundel 
County reflected an assignment of the deed of trust to Fannie Mae.  Fannie Mae contracted 
with a predecessor entity of Nationstar to service the loan on Fannie Mae’s behalf.13  
 
 
 
12 The time and precise mechanism of the assignment are not alleged in the 
complaint or otherwise clear from the record. 
13 The predecessor entity, known as Seterus, merged with Nationstar in February 
2019, with Nationstar as the surviving entity.  Ms. Kemp originally named Seterus as a 
defendant in her complaint, and Nationstar was subsequently substituted for Seterus as a 
defendant.  For ease of reference, in this opinion we will refer to “Nationstar” as the 
servicer of Ms. Kemp’s mortgage. 
14 
 
2. 
Default, Inspection Fees, and Loan Modification 
Ms. Kemp Defaults 
In 2017, Ms. Kemp fell behind on her mortgage payments.  On April 10, 2017, 
Nationstar declared the mortgage to be in default and threatened foreclosure if she did not 
cure the default.14   
 
Communications Concerning Nationstar’s Property Inspection Charges 
 
On or about July 14, 2017, Ms. Kemp asked Nationstar for certain information about 
her mortgage.  On or about July 24, 2017, Nationstar replied and disclosed to Ms. Kemp 
for the first time that her account had been charged “property preservation charges from 
August 26, 2016 through July 24, 2017.”  
On September 6, 2017, Ms. Kemp asked Nationstar for more information regarding 
the property preservation charges.  Nationstar replied on September 25, 2017, stating that 
Ms. Kemp owed $180 in property inspection fees that would be included as part of the 
payoff total for her mortgage.  Another letter by Nationstar, dated September 26, 2017, 
stated that the deed of trust authorized it to conduct property inspections and to charge 
related fees when an account is more than 45 days delinquent, and every 30 days thereafter 
if the delinquency continues, to verify that the property is occupied and in good repair.  
 
 
 
14 Ms. Kemp’s personal liability on the loan had been extinguished in 2011 as a 
result of a discharge in bankruptcy.  Her home remained subject to the terms of the deed 
of trust. 
15 
 
 
Loan Modification 
 
 
In the meantime, in a letter dated July 20, 2017, Nationstar, on behalf of Fannie 
Mae, had offered Ms. Kemp a trial loan modification plan that required her to make three 
payments at the beginning of September, October, and November 2017.  Ms. Kemp 
accepted the trial plan and made the payments required by the trial plan. 
On November 8, 2017, Nationstar, on behalf of Fannie Mae, offered Ms. Kemp a 
loan modification.  The loan modification agreement, which was drafted by Nationstar on 
behalf of Fannie Mae, identified Fannie Mae as the “lender.”  Ms. Kemp agreed to the loan 
modification in the belief that the offer included only amounts that Nationstar was lawfully 
entitled to charge.  However, the loan modification agreement had capitalized the property 
inspection fees into the mortgage principal.15  
B. 
Litigation Concerning the Property Inspection Fees 
 
1. 
Complaint 
 
In December 2017, Ms. Kemp filed a complaint against Fannie Mae and Nationstar 
in the Circuit Court for Montgomery County.  The complaint, as amended a month later, 
included one count under the federal Truth in Lending Act, 15 U.S.C. §1601 et seq., and 
five counts based on State law, including CL §12-121 and the MCDCA.  Each count of the 
 
15 Nationstar apparently had a practice of imposing inspection fees in connection 
with the mortgages it serviced in Maryland through another of its subsidiaries.  Subsequent 
to the events in this case, it entered into an Assurance of Discontinuance with the Consumer 
Protection Division in which it agreed to cease and desist from assessing such fees and to 
make restitution of fees assessed with respect to those mortgages.  Consumer Protection 
Division v. Nationstar Mortgage LLC (May 14, 2018).  
16 
 
complaint was based on the contention that Fannie Mae, and Nationstar as its agent, were 
prohibited from assessing the property inspection fees against Ms. Kemp.  The complaint 
sought to have the case certified as a class action on behalf of other similarly situated 
borrowers.    
Some counts of the complaint alleged claims against both Fannie Mae and 
Nationstar; other counts asserted a claim against only one of the defendants.16  During the 
course of this litigation Fannie Mae and Nationstar have been represented by the same 
counsel, who have made the same filings and arguments on behalf of both.  Because the 
allegations of the complaint are based on actions that Nationstar took as servicer of Ms. 
Kemp’s loan on behalf of Fannie Mae, for ease of reference we will refer to Nationstar in 
the remainder of this opinion when discussing filings and legal arguments made on behalf 
of both defendants in the complaint – who are also the Petitioners and Cross-Respondents 
 
16 Count I sought declaratory and injunctive relief against both Fannie Mae and 
Nationstar with respect to collection of property inspection fees.  Count IV sought statutory 
damages from both Fannie Mae and Nationstar with respect to those fees under CL §12-
114 of the Maryland Usury Law.   
The other three counts alleging State law violations were brought against Nationstar 
alone.  Count II asserted a claim of unjust enrichment with respect to past collections of 
property inspection fees.  Count III asserted a claim under the MCDCA and Maryland 
Consumer Protection Act with respect to the property inspection fees.  Count V alleged 
that the assessment of the property inspection fees violated the Maryland Mortgage Fraud 
Protection Act, Maryland Code, Business Regulation Article, §7-401 et seq. 
The claim in Count VI under the federal Truth in Lending Act was asserted against 
both Fannie Mae and Nationstar or alternatively, if the court were to determine that Fannie 
Mae was the only appropriate defendant under that law, against Fannie Mae alone. 
17 
 
in this appeal.  We will refer to them individually only when the discussion involves a 
distinction between their capacities as assignee (Fannie Mae) and servicer (Nationstar). 
2. 
Removal to Federal Court and Remand 
 
Nationstar removed the case to the United States District Court for the District of 
Maryland, where Ms. Kemp filed the Second Amended Complaint, which included the 
same counts as the prior amended complaint.  The federal court granted Nationstar’s 
motion to dismiss the federal law claim and remanded the State law claims to the Circuit 
Court.   
3. 
Dismissal of State Law Claims 
Once back in the Circuit Court, Nationstar moved in July 2018 to dismiss the State 
law claims.  Following a hearing on September 13, 2018, the Circuit Court granted 
Nationstar’s motion to dismiss in a Memorandum and Order dated October 19, 2018.17  
The Circuit Court concluded that neither Fannie Mae nor Nationstar was subject to the 
prohibition in CL §12-121 because neither fit the definition of “lender” in CL §12-121(f).  
Accordingly, it dismissed the State law claims of the complaint.  In addition, the court 
reasoned that the letters sent by Nationstar to Ms. Kemp were not attempts to collect a debt 
and thus were not within the purview of the MCDCA.18   
 
17 The Memorandum and Order mistakenly cites the Secondary Mortgage Loan Law 
and a case interpreting that law, illustrating how the title of that law can mislead even a 
sophisticated reader.  Memorandum and Order at 6 n.4; see footnote 4 above.  However, 
that erroneous reference did not affect the substance of the Circuit Court’s reasoning. 
18 The Circuit Court also held that, to the extent Ms. Kemp alleged a claim under 
the Maryland Consumer Protection Act, it was purely derivative of her claim under the 
18 
 
4. 
Appeal  
Ms. Kemp appealed.  The Court of Special Appeals reversed the rulings of the 
Circuit Court in part and affirmed them in part.  248 Md. App. 1 (2020). 
After examining CL §12-121, its context in the Maryland Usury Law, the legislative 
history of that law, and related Maryland case law, the Court of Special Appeals concluded 
that the prohibition against inspection fees in CL §12-121 applies to an assignee of a 
mortgage loan.  Accordingly, the intermediate appellate court reversed the Circuit Court’s 
dismissal of Ms. Kemp’s claims to the extent that the ruling was based on the premise that 
CL §12-121 did not apply to Fannie Mae or its servicer, Nationstar.19  248 Md. App. at 19-
28. 
However, the Court of Special Appeals affirmed the Circuit Court’s dismissal of the 
claim under the MCDCA, based on different reasoning than that of the Circuit Court.  
Relying on its prior decisions applying the MCDCA in Chavis v. Blibaum Associates, P.A., 
246 Md. App. 517, 529 (2020), cert. granted, 471 Md. 100 (2020), and Allstate Lien & 
Recovery Corp. v. Stansbury, 219 Md. App. 575, 591 (2014), aff’d on other grounds, 445 
Md. 187 (2015), the intermediate appellate court concluded that dismissal of the MCDCA 
claim was appropriate on the theory that MCDCA prohibits the use of an illegal “method” 
 
MCDCA.  In addition, the court held that the complaint lacked the requisite particularity 
to state a claim under the Maryland Mortgage Fraud Prevention Act.  
19 The intermediate appellate court also reversed the Circuit Court’s dismissal of the 
unjust enrichment claim and the claim under Maryland Mortgage Fraud Prevention Act to 
the extent those rulings were based on an apparent fact finding by the Circuit Court 
inconsistent with the record and procedural posture of the case.  248 Md. App. at 29-30. 
 
19 
 
of debt collection, but does not provide a vehicle for attacking the validity of the underlying 
debt.20  248 Md. App. at 31-38.  
We subsequently granted Nationstar’s petition for a writ of certiorari and Ms. 
Kemp’s cross-petition. 
III 
Discussion 
To resolve this appeal, we must answer the following questions:   
(1) Does CL §12-121 apply to an inspection fee charged by an assignee of a 
mortgage?  
(2) Did the complaint adequately allege that Nationstar attempted to collect an 
alleged debt by asserting a right to collect inspection fees with knowledge that the right did 
not exist, in violation of the MCDCA? 
A. 
General Principles Governing Appellate Review 
 
1. 
Standard of Review of Dismissal of Complaint 
 
When deciding whether to grant a motion to dismiss a complaint as a matter of law, 
a trial court is to assume the truth of factual allegations made in the complaint and draw all 
reasonable inferences from those allegations in favor of the plaintiff.  Ceccone v. Carroll 
 
20 The Court of Special Appeals did not address the question whether Ms. Kemp’s 
complaint adequately stated a stand-alone claim under the Maryland Consumer Protection 
Act, on the basis that she had not made that argument in the Circuit Court.  248 Md. App. 
at 38-39.  It also affirmed the Circuit Court’s ruling that she had failed to state her claim 
under the Maryland Mortgage Fraud Prevention Act with sufficient particularity.  Id. at 39-
43.  Neither of those issues is before us in this appeal. 
20 
 
Home Services, LLC, 454 Md. 680, 691 (2017).  When an appellate court reviews a trial 
court’s grant of a motion to dismiss, the appellate court applies the same standard to assess 
whether the trial court’s decision was legally correct.  Id.  Because the resolution of the 
motion to dismiss turns on a question of law, appellate review is de novo, without any 
special deference to the trial court.  Id.  The questions of law at issue in this appeal involve 
the interpretation of two statutes – the Maryland Usury Law and the MCDCA.   
 
2. 
Principles of Statutory Interpretation 
 
The goal of statutory interpretation is to “ascertain and effectuate the real and actual 
intent of the Legislature.”  Gardner v. State, 420 Md. 1, 8 (2011).  We begin with an 
examination of the text of a statute within the context of the statutory scheme to which it 
belongs.  Aleman v. State, 469 Md. 397, 421, cert. denied, 141 S. Ct. 671 (2020).  Review 
of the text does not merely entail putting the words under the microscope by themselves 
with a dictionary at hand, because words that appear “clear and unambiguous when viewed 
in isolation” may “become ambiguous when read as part of a larger statutory scheme.”  
Fisher v. Eastern Correctional Institution, 425 Md. 699, 707 (2012).  A particular section 
of a statute must be construed in a manner consistent with the larger statute’s object and 
scope.  Blackburn Ltd. P’ship v. Paul, 438 Md. 100, 122 (2014).  We also review the 
legislative history of the statute to confirm conclusions drawn from the text or to resolve 
ambiguities.  In addition, we examine prior case law construing the statute in question.  
Aleman, 469 Md. at 421.  Finally, it is important to consider the consequences of alternative 
interpretations of the statute, in order to avoid constructions that are “illogical or 
21 
 
nonsensical, or that render a statute meaningless.”  Couret-Rios v. Fire & Police 
Employees’ Retirement System, 468 Md. 508, 528 (2020).  
B. 
Whether CL §12-121 Applies to the Fees Charged by Nationstar 
1. 
Prohibition of Inspection Fees in CL §12-121  
 
The relevant provision of CL §12-121 prohibits the imposition of a “lender’s 
inspection fee” in connection with a mortgage loan, except in limited circumstances.  CL 
§12-121(b).  The statute defines “lender’s inspection fee” as “a fee imposed by a lender to 
pay for a visual inspection of real property.”  CL §12-121(a). 
CL §12-121 was added, with several other provisions, to the Usury Law in 1986.  
Chapter 628, Laws of Maryland 1986.  The impetus for that bill was the perception that 
closing costs for sales of real property in Maryland were high relative to those in other 
states.  To deal with that problem, in 1985 the Governor appointed a Task Force on Real 
Property Closing Costs.  Report of the Task Force on Real Property Closing Costs (January 
1986) at pp.1-4.  One of the Task Force’s recommendations was that certain inspection 
fees often imposed in connection with mortgage loans be limited to circumstances in which 
such inspections were truly necessary.  Id. at 33-34 (Task Force Recommendation No. 7).   
The Task Force’s report resulted in various amendments to the Usury Law, 
including CL §12-121.  Although the bill was largely targeted at fees imposed at the 
origination of a mortgage loan, CL §12-121 and certain other provisions added by the 1986 
22 
 
law apply during the life of the loan.21  Nothing in the Task Force’s report, or the legislation 
that resulted from it, indicated an intent to abrogate the common law rule that an assignee 
of a loan steps into the shoes of its assignor.   
Nationstar does not argue that the type of inspection fee that it allegedly charged 
Ms. Kemp falls within a statutory exemption in CL §12-121 or is otherwise beyond the 
purview of the statute.22  Rather, Nationstar argues that it is exempt from CL §12-121 
because, as the agent of Fannie Mae, the assignee of Ms. Kemp’s mortgage loan, it was not 
acting on behalf of a “lender” prohibited from charging such fees. 
2. 
Nationstar’s Asserted Justification for Charging Inspection Fees 
In its correspondence with Ms. Kemp, in its argument in the Circuit Court, and in 
this appeal, Nationstar has pointed to paragraph 14 of the deed of trust as its authority to 
charge property inspection fees.23  That provision reads in pertinent part:  “Lender may 
charge Borrower fees for services performed in connection with Borrower’s default … 
including, but not limited to, … property inspection … fees….  Lender may not charge 
fees that are expressly prohibited … by Applicable Law.”  The phrase “Applicable Law” 
is defined to include state statutes, among other laws.  CL §12-121, which prohibits the 
 
21 See Taylor v. Friedman, 344 Md. 572 (1997), discussed in Part III.B.5 of this 
opinion. 
22 Nationstar conceded at the hearing in the Circuit Court that the statutory 
exceptions to the prohibition on inspection fees do not apply to this case.  
23 The provision is quoted in full in Part II.A.1 of this Opinion.  As indicated there, 
this deed of trust is on a Fannie Mae form. 
23 
 
collection of property inspection fees by a “lender,” is such a state statute.  Nationstar has 
conceded that, under paragraph 14, the original “lender” – Countrywide – was thus not 
authorized to charge a property inspection fee under paragraph 14 of the deed of trust. 
In Nationstar’s view, when Countrywide assigned the deed of trust to Fannie Mae, 
Fannie Mae became the “lender” under the deed of trust and specifically acquired the 
“lender’s” rights to charge fees as provided by paragraph 14 of that instrument.  Nothing 
in the deed of trust itself recognizes that an assignee of the “lender” succeeds to the right 
to charge fees, as authorized and limited by paragraph 14, so it must occur by virtue of the 
common law rule.24  Nationstar thus relies on the common law rule concerning assignment 
of mortgages to conclude that Fannie Mae is a “lender” under the deed of trust and 
authorized to charge fees under paragraph 14 as its basis for charging an inspection fee in 
this case.  However, in Nationstar’s view, Fannie Mae is not a “lender” for purposes of the 
statutory restrictions on fees charged by a “lender” that are also incorporated in paragraph 
14. 
Nationstar’s position that Fannie Mae succeeded to the authorization, but not the 
limitations, on the assessment of fees in paragraph 14, is primarily based on its reading of 
CL §12-101(f), the general definition of “lender” in the definition section of the Maryland 
Usury Law.   
 
 
 
24 The term “lender” is defined in the deed of trust to mean Countrywide; there is 
no mention in that document of an assignee of the “lender” in general or of an assignee of 
Countrywide in particular.   
24 
 
3. 
CL §12-101(f) – Definition of “Lender” 
Statutory Text 
During the relevant period, CL §12-101(f) defined “lender” as “a person who makes 
a loan under this subtitle.”25  The “subtitle” referenced in that definition is the Maryland 
Usury Law.  Noting the reference to making a loan and the absence of the word “assignee” 
in CL §12-101(f), Nationstar argues that CL §12-121 – which is also part of the Maryland 
Usury Law – does not apply to an assignee of a mortgage loan – or at least not to Fannie 
Mae.26  In accordance with our approach to statutory construction, we look to the context 
of the statutory scheme of which CL §12-101(f) is a part – the Maryland Usury Law. 
 
25 The conduct at issue in this case occurred prior to a 2018 amendment of CL §12-
101(f).  As a result of that amendment, the statute now defines “lender” as “a licensee or a 
person who makes a loan subject to this subtitle.”  Financial Consumer Protection Act of 
2018, Chapters 732, 790, Laws of Maryland 2018.  A definition of the term “licensee,” 
also added by the 2018 amendments, encompasses anyone required to be licensed to make 
loans subject to the Usury Law, whether or not the person is actually licensed.  CL §12-
101(g).  The substitution of the phrase “subject to this subtitle” for “under this subtitle” at 
the end of the definition of “lender” appears to be stylistic in nature.   
26 Nationstar has argued that CL §12-121 generally does not apply to any assignee 
of a mortgage loan based on the definition of “lender” in CL §12-101(f).  See Brief of 
Petitioners/Cross-Respondents at 2 (“Section 12-121’s plain language therefore does not 
include a mortgage purchaser …”); id. at 14-17, 23-24; Reply Brief of Petitioners/Cross-
Respondents at 2 (“Section 12-101(f)’s Definition of ‘Lender’ Does Not Include Mortgage 
Assignees Or Servicers”).   
 
However, at times in its briefs and at oral argument, Nationstar appeared to make a 
narrower claim – (1) that an assignee of a mortgage loan could be covered by the definition 
in CL §12-101(f) if it otherwise originated a loan (i.e., “made” a loan, in Nationstar’s view) 
at some time to someone else but (2) that Fannie Mae would never fall into that category 
because it is prohibited by federal law from originating loans under 12 U.S.C. §1719(a)(2).  
Nationstar never fully articulates that narrower argument, perhaps because the notion that 
an assignee would qualify as a “lender” for a particular loan simply because it happened to 
25 
 
Statutory Context  
The Legislature’s use of the word “lender” in the Maryland Usury Law is not limited 
to CL §12-121.  The term “lender” is used throughout that law in specifying restrictions 
that the Usury Law sets on the terms of loans of money, not just mortgage loans.27  In some 
parts of the subtitle, that word is used in provisions that regulate the lending entity’s 
conduct before or when the loan is extended.  CL §12-106(b), for example, requires the 
“lender” to furnish to “the borrower” a written statement with specified information before 
the loan contract is executed.  Similarly, CL §12-127(b) specifies matters that the “lender” 
must consider before making a mortgage loan.  These provisions clearly focus on persons 
who originate (or are about to originate) a loan.  Thus, for these particular provisions, 
reading “lender” to include only the originator of a loan would not be inconsistent with the 
Legislature’s intent to regulate a lending entity’s conduct at the origination stage.   
Other parts of the Usury Law, however, clearly regulate conduct that occurs later in 
the life of the loan.  They also use the term “lender.”  CL §12-126(c), which applies when 
a borrower prepays a loan before the expiration of the term of the loan, requires the “lender” 
to give the borrower a refund or credit for the unearned portion of precomputed interest.  
CL §12-105(d) prohibits a “lender” from imposing a penalty or other charge on borrowers 
 
have originated (“made”) a loan to someone at some other time unrelated to the transaction 
in question seems illogical. 
 
27 As the Court of Special Appeals recounted, numerous other provisions of the 
Usury Law regulate the actions of a “lender.”  E.g., CL §12-108 (charging of points); CL 
§12-113 (anti-discrimination provision); CL §12-124 (insurance required of borrower); CL 
§12-126 (pre-payment penalty).  See 248 Md. App. at 15-17. 
26 
 
who prepay their mortgages.  CL §12-109.1 sets forth the process that a “lender” or 
“servicer” must follow if it determines that the borrower must increase escrow payments 
under a first mortgage or deed of trust.  CL §12-115 regulates a “lender’s” repossession of 
goods that secure a loan.  CL §12-106(c) generally requires a “lender” to provide the 
borrower with annual statements of payments made and principal amounts due on 
residential real property loans.  These provisions, which appear to apply over the life of a 
loan, suggest that the term “lender” includes not only an originator of a loan but also an 
assignee.  
Thus, whether the term “lender” in CL §12-101(f) is limited to the originator of a 
mortgage loan or also encompasses an assignee of the originator is at best unclear; viewed 
in the context of its usage throughout the Usury Law, the term is ambiguous.  We therefore 
consider the legislative history of the Maryland Usury Law to discern the “real and actual 
intent” of the Legislature.   
Legislative History of CL §12-101(f) 
As recounted earlier, the Maryland Usury Law has a long lineage dating back to 
colonial times.  For centuries, the Usury Law had not included a specific definition of 
“lender.”  But, as outlined earlier, it was clear that the Usury Law regulated the conduct of 
a person who was assigned a loan, not just the originator of the loan – presumably on the 
well-accepted principle that an assignee succeeded to the rights and obligations of its 
assignor with respect to the loan.  Indeed, since at least 1824, the Maryland Usury Law has 
included a section that relieved an assignee of liability under that law if the assignee took 
the assignment for bona fide and legal consideration without notice of the violation of that 
27 
 
law.  See Chapter 200, Laws of Maryland 1824, codified as revised at CL §12-112.  The 
clear implication of that provision – consistent with the common law – is that an assignee 
who takes an assignment with notice of a restriction under the Usury Law is subject to such 
liability.28  See Thompkins v. Mountaineer Investments, LLC, 439 Md. 118, 132 n.12 
(2014); Arrington v. Colleen, Inc., 2001 WL 34117735 at *9 (D. Md. 2001). 
The definition of “lender” in CL §12-101(f) was first added to the Maryland Usury 
Law as part of a new definitions section of that law when the Usury Law was re-codified 
as part of code revision in 1975 into the then-new Commercial Law Article.29  Chapter 49, 
§3, Laws of Maryland 1975.  As is generally the case in code revision, the Commission 
that drafted the re-codified law did not intend to make any substantive change to the 
existing Usury Law and so informed the General Assembly in its report.  Specifically, the 
Commission stated that the recodification of the Usury Law in CL §12-101 et seq. was 
“designed to clarify, but not change, the existing law.”  Commission Report No. 1975-1 of 
the Governor’s Commission to Revise the Annotated Code at p. 16.  The recodification 
took into account the interpretations of that law in the decisions of this Court and in the 
published opinions of the Attorney General.  Id.  A few years later, this Court confirmed 
that the recodification of the Maryland Usury Law as part of the Commercial Law Article 
 
28 In this regard, it cannot be said that an assignee lacks notice of a statutory 
restriction incorporated in a loan agreement. 
29 The opinion of the Court of Special Appeals in this case contains an excellent 
summary of the provisions of the Usury Law and its placement among various other 
consumer finance laws as a separate subtitle in Title 12 of the Commercial Law Article.  
See 248 Md. App. at 14-19. 
28 
 
did not affect the substance of that law.  Hoffman v. Key Federal Savings & Loan Ass’n, 
286 Md. 28, 37, 42-43 (1979).   
Given that the recodification with the new general definitions section of the Usury 
Law was not intended to change that law, it is evident that the code revisors included a 
definition of “lender,” as well as of certain other terms, in an effort to avoid making what 
might otherwise appear to be substantive changes in one of the various consumer finance 
laws included in the new Commercial Law Article.  The Revisor’s Notes to the definitions 
sections in the code revision bill bear this out.  For example, the Revisor’s Note to the new 
definition of “lender” in CL §12-101(f) states that “[t]his subsection is new language added 
to indicate that, in this subtitle [i.e., the Maryland Usury Law], the term “lender” relates 
only to a person who lends money under the provisions of this subtitle and not, for example, 
under any other credit law.”  Chapter 49, §3, Laws of Maryland 1975 at p. 378 (emphasis 
added).  Thus, the addition of this definition to the Usury Law was the code revisors’ effort 
to ensure that a law once isolated in its own article of the code (former Article 49) would 
reside without unnecessary confusion in proximity to other laws in the new Commercial 
Law Article that used the same term for different purposes.30  Otherwise, the definition of 
 
30 In general, each of the 36 articles of the most recent revision of the Maryland 
Code begins with a section that sets forth definitions that apply across multiple titles of the 
particular article of the code.  The Commercial Law Article is one of three that does not 
(the others are the Courts & Judicial Proceedings Article and the Natural Resources 
Article).  Presumably, this is because the code revisors elected to devote Titles 1 through 
10 of the Commercial Law Article to the Maryland version of the Uniform Commercial 
Code, a model law adopted by most states that consists of 10 titles, and thus avoid a 
nightmare for future generations of Maryland lawyers if the numbering systems did not 
correlate to the uniform code.  (The Courts & Judicial Proceedings Article and the Natural 
29 
 
“lender” in CL §12-101(f) – “a person who makes a loan under this subtitle” – is 
tautological, much like the definition of “borrower” that was also added by the revisors.  
See CL §12-101(b) (“a person who borrows money under this subtitle”).  From the revisors’ 
perspective, the key words in both of those definitions were “under this subtitle” as that 
phrase made clear that those who were regulated or benefited by the Usury Law as 
recodified were the same as before the recodification.31 
 
Consequences of Nationstar’s Interpretation for the Usury Law 
 
If Nationstar’s argument is correct, the Legislature quietly made two very 
significant substantive changes to both the Usury Law and the common law during code 
revision in 1975 when it added the “lender” definition to the Usury Law:  First, under 
Nationstar’s argument, the Legislature implicitly abrogated the longstanding common law 
rule that an assignee of a loan succeeds to the same rights and limitations as its assignor – 
in the case of an initial assignment, the person who originated the loan.  Second, it 
implicitly exempted an assignee of any loan from most of the restrictions of the Usury Law. 
As to whether the Legislature’s adoption of the “lender” definition implicitly 
abrogated the common law on assignments, it is a standard canon of statutory construction 
 
Resources Article, the first two articles created as a result of code revision, were both 
enacted in 1973 before a style manual had been developed for the project). 
31 This is also made evident by the fact that the code revisors included identical 
definitions of “lender” for other laws recodified in the Commercial Law Article.  However, 
in each of those definitions, the identical phrase “under this subtitle” carried a different 
meaning because it referred to a different finance law.  See, e.g., CL §12-201(b) (1975) 
(defining “lender” for purposes of the Maryland Small Loan Law); CL §12-301(c) (1975) 
(defining “lender” for purposes of the Maryland Consumer Loan Law).  
30 
 
that statutes are not construed to repeal the common law by implication.  See United Bank 
v. Buckingham, 472 Md. 407, 433 (2021) (“It is a generally accepted rule of law that 
statutes are not presumed to repeal the common law further than expressly declared[.]”); 
State v. North, 356 Md. 308, 311-12 (1999) (although the General Assembly may abrogate 
the common law, a repeal will not be implied unless “plainly pronounced”).  There is no 
indication in the legislative history of the 1975 code revision of any intention to change the 
common law rule on assignment of a loan, much less an intention that was “plainly 
pronounced.”  Nor is there any indication of a legislative purpose behind such a change – 
for example, that the Legislature thought that borrowers of loans that had been assigned 
were in any less need of protection than borrowers whose loans remained with the original 
lending entity.  Given the ease and frequency with which loans are assigned – and have 
long been assigned in Maryland – it is very unlikely that the Legislature intended to change 
the common law so substantially without making such a purpose clear.   
Similarly lacking is any indication that the Legislature intended to narrow the scope 
of the Usury Law by inserting a gaping loophole in those provisions that use the term 
“lender” in the context of post-origination conduct.  The consequences that would follow 
from Nationstar’s proposed interpretation of CL §12-101(f) with respect to mortgage loans 
include the following: 
 
●  Prepayment credits.  A homeowner who prepays a mortgage loan would be 
entitled to a refund or credit of the unearned portion of the precomputed interest charge 
31 
 
only from the originator of the mortgage but not from an assignee.32  In this case, if Ms. 
Kemp prepaid the mortgage after its assignment, she would have to look to Countrywide 
for a refund, not to Nationstar. 
 
●  Prepayment penalties.  A homeowner who prepays a mortgage loan could not be 
charged a penalty by the originator of the loan, but could be charged such a penalty by an 
assignee of the loan.33  In this case, if Ms. Kemp prepaid the mortgage after its assignment, 
Nationstar would not only owe no refund or credit, but also could charge her a penalty for 
prepaying the loan while Countrywide could not have done so. 
 
●  Refunds of excess escrow balance.  The statutory procedures for obtaining a 
refund of an excess balance that a borrower has paid into an escrow account that relates to 
a mortgage loan (for the payment of taxes, insurance and other expenses related to the loan) 
would apply only if the originator of the loan still holds the loan.34  In this case, Ms. Kemp 
would have to look to long-gone Countrywide, not Nationstar, for such a refund. 
 
●  Loan statements.  The originator of a mortgage loan, but not the assignee, would 
be required to provide a statement to the borrower, at least annually, concerning how the 
 
32 See CL §12-126(c) (“In the event of prepayment of the entire loan, the lender 
shall refund or credit to the borrower the unearned portion of the precomputed interest 
charge.”) (emphasis added). 
33 See CL §12-105(d) (“In connection with a mortgage loan, a lender may not 
require or authorize the imposition of a penalty, fee, premium, or other charge in the event 
the mortgage is prepaid in whole or in part.”) (emphasis added).  
34 See CL §12-109.1(d) (“A refund of any excess amount shall be made … [w]ithin 
60 days after receipt by the lender of the borrower’s request for a refund …”) (emphasis 
added). 
32 
 
borrower’s payments were credited and the remaining unpaid principal balance.35  In this 
case, Countrywide, but not Nationstar, would be required to provide such statements on 
the use of payments and the status of the loan balance to Ms. Kemp. 
 
●  Exemptions from escrow account requirements.  Some provisions of the Usury 
Law would be nonsensical if an “assignee” of a loan was necessarily distinct from a 
“lender,” as they refer to a “lender” who purchases (i.e., takes assignment of) a loan.36 
There would also be consequences for other types of loans.  For example: 
 
●  Repossession procedures.  The Usury Law’s provisions concerning repossession 
of goods securing a loan would apply to the originator of that loan, but not to an assignee 
of the loan.37 
 
●  Interest rates.  An interpretation of the term “lender” that excludes an assignee 
could limit the permissible interest rate that a lender could set.38   
 
35 See CL §12-106(c) (“At least annually …, a lender who receives scheduled 
monthly periodic payments on … loans secured by an interest in real property shall furnish 
to the borrower a written statement …”) (emphasis added). 
36 See, e.g., CL §12-109(d) (exemption from certain escrow account requirements 
applicable to “out-of-state lender” that purchases a loan, but exemption does not apply to 
“Maryland lender” that later purchases the same loan). 
 
37 See, e.g., CL §12-115(a)(1) (“A lender may repossess goods securing a loan …”) 
(emphasis added). 
38 See CL §12-103(a)(3)(iii) (making certain higher permissible interest rates 
contingent on the “lender’s” compliance with repossession provisions of CL §12-115) 
(emphasis added); CL §12-103(b)(1)(iii) (making certain higher interest rates for mortgage 
loans contingent on the absence of a prepayment penalty). 
33 
 
●  “Usury” and assignees.  Under Nationstar’s reading of the definition of “lender,” 
an assignee would arguably be exempt from regulation under the Usury Law because the 
definition of “usury” in that law uses the term “lender.”39   
It would be anomalous to conclude that the General Assembly made such major 
substantive changes in the Usury Law by means of a code revision bill that expressly was 
intended not to change the law – changes apparently undetected for the next 40-plus years.  
As recounted earlier,40 this Court in applying the Usury Law to mortgage loans in B. F. 
Saul warned against an interpretation of the statute that would lead to “absurd … 
consequences.”  250 Md. at 722.  In this case, such consequences would ensue if the Court 
were to construe the 1975 code revision to have both abrogated the common law rule that 
an assignee succeeds to the same rights and obligations as its assignor and substantially 
narrowed the scope of the Usury Law.  None of these anomalous and illogical results 
pertains if the references to a “lender” are construed consistently with the common law 
relating to assignment of loans.41   
 
39 See CL §12-101(m) (defining “usury” as “the charging of interest by a lender in 
an amount which is greater than that allowed by [the Usury Law]”) (emphasis added).    
40 See Part I.A.3 of this opinion. 
41 As noted in footnote 26 above, Nationstar has argued, on the one hand, that all 
assignees are exempt from CL §12-121 and, on the other, that some are exempt and some 
are not.  The first results in the absurd consequences outlined in the text above; the second 
does not always square with the “plain language meaning” that Nationstar would ascribe 
to the statute.  Moreover, the two arguments are inconsistent with one another.  The 
Dissenting Opinion, which largely adopts Nationstar’s arguments, does not resolve the 
inconsistency. 
34 
 
4. 
Use of the Word “Assignee” in CL §12-109.2(a)(3) 
In support of its interpretation of the term of “lender” in CL §12-101(f), Nationstar 
also relies on a definition of “lender” that appears in CL §12-109.2(a)(3) and that applies 
only to that section.42  Noting that the text of CL §12-109.2(a)(3) includes a reference to 
an “assignee of a lender,” Nationstar draws a negative inference that the definition of 
“lender” generally applicable in the Usury Law in CL §12-101(f) must not encompass an 
assignee of a loan originator.  
The language of CL §12-109.2(a)(3) must be considered in the context in which it 
appears.  It appears in, and applies to, one of the three sections in the Usury Law that 
concern escrow accounts – accounts in which funds for the payment of taxes, insurance 
premiums, and other expenses associated with real property are accumulated to pay those 
bills when they come due.  See CL §12-109(a)(2); 12-109.2(a)(2).  
 
42 CL §12-109.2 provides: 
 
(a)(1) In this section the following terms have the meanings indicated. 
(2) “Escrow account” has the meaning stated in § 12-109 of this 
subtitle. 
(3) “Lender” includes a lender and assignee of a lender. 
(4) “Mortgage” includes a mortgage and a deed of trust. 
(b)(1) Funds in any escrow account shall be kept separate from and may 
not be commingled with the funds of the lender. 
(2) A lender may place escrow funds received in connection with 
more than one mortgage into a single escrow account. 
(3) In the event of the bankruptcy of the lender, any escrow funds 
placed in any escrow account under this section may not be considered to be 
part of the bankrupt estate of the lender. 
 
(emphasis added).  
35 
 
In 1974, the Legislature enacted the first of the escrow account sections, the 
predecessor of CL §12-109, which requires a “lending institution” that makes a mortgage 
to pay interest on the escrow account.  Chapter 420, Laws of Maryland 1974.  As is evident, 
this transaction is the opposite of most transactions covered by the Usury Law.  With regard 
to an escrow account, the consumer is, in a certain sense, lending money to the financial 
institution for the period before the bill is due, and the financial institution pays interest to 
the consumer.  The statute imposed the obligation to pay interest on an escrow account on 
the financial institution that lent money secured by the mortgage or an “assignee of an 
expense or escrow account.”  The evident purpose was to impose the obligation of paying 
interest on the entity that had the benefit of the funds held in escrow, whether or not that 
entity was the originator of the mortgage loan or an assignee of the escrow account.  
In 1978, the General Assembly enacted a second section related to escrow accounts, 
codified at CL §12-109.1, which afforded the borrower more control over the use of excess 
funds accumulated in an escrow account, including the option to receive a refund of those 
funds.  CL §12-109.1(b)-(c).  The prohibitions in that section related to “any escrow 
account” and the statute imposed certain obligations as to escrow accounts on the “lender 
or servicer” of a loan.  CL §12-109.1(b), (e).  No reference was made in that statute to an 
assignee of a loan. 
It is evident from a series of contemporaneous Attorney General opinions that these 
provisions concerning escrow accounts had raised a number of questions as to the extent 
to which these statutory obligations followed either the escrow account or the mortgage 
when an assignment was made, as an escrow account is not necessarily assigned with the 
36 
 
mortgage.  See, e.g., 60 Opinions of the Attorney General 403 (1975) (discussing, among 
other things, an example in which a mortgage was assigned to a bank, but the assignor 
retained servicing and control of the escrow account); 63 Opinions of the Attorney General 
438 (1978) (discussing whether an out-of-state assignee of a mortgage loan was subject to 
the requirement to pay interest on an escrow account and whether the borrower could look 
instead to the original in-state lender/assignor); 67 Opinions of the Attorney General 104 
(1982) (discussing whether a lender’s exemption from the obligation to pay interest on an 
escrow account also applied to the assignee of the escrow account).   
Although the Attorney General’s answers to these questions are beside the point 
here, the fact that the questions were asked demonstrates that the mortgage industry and 
State regulators were seeking guidance on how the escrow account provisions in the Usury 
Law applied when there was an assignment of a mortgage, particularly when an escrow 
account did not accompany that assignment or was later assigned separately.  
When the General Assembly later added a third section concerning escrow accounts 
– CL §12-109.2 – to the Usury Law in 1986 to ban service charges,43 it made clear in the 
substantive terms of that provision that the limitations imposed with respect to escrow 
accounts also applied to “a lender, or the assignee of the lender.”  CL §12-109.2(b) (1986).  
When that law was amended a few years later in 1989 to add additional restrictions barring 
 
43 This provision prohibited a lender from imposing collection fees or service 
charges in connection with an escrow account and was part of the same bill designed to 
lower closing costs in Maryland that enacted CL §12-121.  Chapter 628, Laws of Maryland 
1986. 
37 
 
commingling of escrow accounts, the reference to “a lender, or the assignee of the lender” 
was converted to a definition, presumably to avoid having to repeat the phrase repeatedly 
in the section.  
There was no indication in the 1986 or 1989 amendments that the General Assembly 
intended to repeal the common law rule that the assignee of a loan steps into the shoes of 
the assignor.  If the General Assembly had intended in 1986 to broadly strip borrowers 
whose loans were assigned of the protection of the Usury Law when it added the definition 
in CL §12-109.2(a)(3) – a section that regulates only escrow accounts – it did not so state 
in the purpose paragraph of the title of either the 1986 or the 1989 bills – or anywhere else 
in the legislative history of CL §12-109.2.   
5. 
Case Law Concerning CL §12-121 
This Court had occasion to construe CL §12-121 as applied to the assignee of a 
mortgage in Taylor v. Friedman, 344 Md. 572 (1997).  That case concerned whether the 
prohibition in CL §12-121 applied to post-default inspection fees in connection with a 
mortgage loan that had been assigned.  The collection fees had been assessed seven years 
after the closing on the loan.  Although the status of the respondent bank as an assignee of 
the mortgage loan was obvious from the facts recited in the Court’s opinion, no one 
apparently thought that made a difference.  The bank did not claim that the 1975 code 
revision had exempted it and other assignees of loans from the Usury Law, and a fortiori 
from the prohibition in CL §12-121.  Rather, the bank in that case focused on the more 
salient argument that legislation proposed by a task force to deal with high closing costs 
should not be construed to apply after the closing.  344 Md. at 581-82.  After reviewing the 
38 
 
legislative history of the 1986 bill that added CL §12-121 to the Usury Law and noting that 
its provisions regulated more than the closing of a loan, the Court held that the prohibition 
in CL §12-121 was not confined to the origination of the loan.  Id. at 584.44  That holding 
applied to the assignee of the mortgage in Taylor and, given the frequency with which 
mortgages were assigned by the time of that decision in 1997, would obviously apply to 
many assignees.45 
This Court also addressed assignments under the Usury Law in Thompkins v. 
Mountaineer Investments, LLC, 439 Md. 118 (2014), although that decision primarily 
related to liability under a different statute – the Secondary Mortgage Loan Law 
(“SMLL”).46  In Thompkins, this Court held that an assignee was not liable for a violation 
of the SMLL committed by the original lender when the loan was originated, but that the 
assignee was subject to the requirements of the SMLL and would be liable for its own 
violations of the statute.  439 Md. at 141.   
While the Thompkins case concerned application of the SMLL, the Court’s analysis 
drew on provisions of the Usury Law and the common law of assignment.  In the course 
 
44 The Court also noted that the General Assembly had deleted the phrase “as a 
condition to granting the loan” from the proposed version of CL §12-121(c)(2), which 
suggested that it intended for the restriction to extend beyond the origination of the loan.  
344 Md. at 583-84. 
 
45 A newspaper article from early 1984 cited in Nationstar’s reply brief reported that 
at least 43% of new mortgage loans had been assigned.  Petitioners/Cross-Respondents 
Reply Brief at 16-17 n.7. 
 
46 See footnote 4 above. 
39 
 
of its opinion, the Court noted that it was unlikely that the General Assembly intended that 
the protections of the SMLL or the Usury Law could be circumvented simply by assigning 
a loan.  439 Md. at 132-33.  The Court also observed that the Usury Law in particular 
contemplated that an assignee could be liable for violations of that law.  Id. at 132 n.12 
(“While one section of the statute states that it does not provide a remedy against an 
assignee of a usurious loan who took the assignment for a ‘bona fide and legal 
consideration without notice of any usury in its creation’ (CL §12-112), it implicitly allows 
a usury action to be brought against an assignee that cannot satisfy that condition.”).47  
Finally, the Court alluded to the common law principle that an assignee steps into the 
“shoes” of its assignor, but distinguished the situation in the case before it, which 
concerned liability for prior violations of the SMLL by the originator of the loan, not the 
ongoing application of the statute to the assignee.  Id. at 139-40.   
No Maryland appellate decision supports Nationstar’s construction of the purview 
of CL §12-121.  Instead, Nationstar relies on unpublished trial court decisions of the federal 
district court, none of which considered the legislative history of the statute.48  The only 
 
47 See also Part III.B.2 of this opinion. 
48 In Suazo v. U.S. Bank Trust, NA, 2019 WL 4673450 (D. Md. Sept. 25, 2019), the 
court held that a count of the complaint in that case alleging a violation of CL §12-121 
failed to state a claim because an inspection fee could be lawful if it fell within an exception 
to the statute and the complaint failed to allege that the inspection fees in question fell 
outside those exceptions.  2020 WL 4673450 at *9-10.  The particular mortgage loans 
involved in the case had been assigned to a special purpose acquisition entity.  In the course 
of its opinion in the case, the court also opined that the entity, as an assignee of the 
mortgage loans, was not a “lender” under the CL §12-101(f) and therefore not subject to 
the restrictions on inspection fees, reasoning that “one does not become a ‘mortgage lender’ 
merely by obtaining title to a mortgage loan.”  Id. at *8-10.  
40 
 
one of those decisions that considered the consequences of that interpretation of CL §12-
101(f) acknowledged that it would render the Maryland Usury Law “functionally 
toothless.”49  As indicated above, however, the most pertinent Maryland appellate cases 
indicate that the Usury Law is alive and well. 
6. 
Summary 
CL §12-121 limits the authority of a person who makes a mortgage loan to charge 
property inspection fees in connection with that loan.  The common law rule, long applied 
to assigned mortgages in Maryland, provides that, if the originator of a mortgage loan 
assigns the loan, the assignee succeeds to the same rights and obligations under the loan 
agreement as its assignor.  When the General Assembly added a definition of “lender” to 
the Maryland Usury Law as part of a 1975 code revision that made the Usury Law part of 
 
  
That court repeated the same analysis, essentially verbatim, in two other 
unpublished decisions that the same judge issued simultaneously with Suazo.  See Robinson 
v. Fay Servicing, LLC, 2019 WL 4735431 (D. Md. Sept. 27, 2019) at *7-9; Roos v. Seterus, 
Inc., 2019 WL 4750418 (D. Md. Sept. 30, 2019) at *4-6.  A few months later, another 
unpublished decision of the federal district court cited Suazo and the related cases to reach 
the same conclusion.  Flournoy v. Rushmore Loan Management Services, LLC, 2020 WL 
1285504 (D. Md. March 17, 2020) at *5-6. 
 
The court in Suazo and the related cases did not consider the Maryland common law 
concerning assignment of mortgages, the structure of the Maryland Usury Law, the fact 
that the addition of CL §12-101(f) was part of a non-substantive code revision of that law, 
or the consequence that its interpretation would exempt an assignee of a loan from most of 
the Usury Law.  Indeed, those decisions relied in part on the Circuit Court decision on 
appeal in this case for their interpretation of the statute.  See Roos, 2019 WL 4750418 at 
*5; Flournoy, 2020 WL 1285504 at *5.  Accordingly, we do not find Suazo or the cases 
that repeated its analysis to be persuasive. 
 
49 Flournoy, 2020 WL 1285504 at *7. 
41 
 
the Commercial Law Article, it did not change that rule.  In keeping with the principle that 
the Court is to harmonize statutory provisions when possible and to presume that the 
Legislature does not abrogate the common law without making that intention clear, we 
interpret the term “lender” in CL §12-121 to include an assignee who holds an outstanding 
loan.50 
The argument advanced by Nationstar in this case – that the assignee (Fannie Mae) 
succeeded to the right of its assignor (Countrywide) to charge fees authorized by paragraph 
14 of the deed of trust, but did not succeed to the limitations incorporated in that 
authorization – would give the assignee greater rights as “lender” under the deed of trust 
than its assignor, the entity actually defined as “lender” in that instrument.  Nationstar finds 
authorization for the fees in paragraph 14 of the deed of trust, while jettisoning the statutory 
limitations such as CL §12-121 explicitly incorporated in that authorization.51  The 
 
50 Noting that CL §12-122 provides that a “knowing and willful” violation of CL 
§12-121 is a misdemeanor, Nationstar argues that CL §12-121 should be construed 
narrowly not to apply to an assignee of a loan under the “rule of lenity.”  The “rule of 
lenity”  is “not a rule in the usual sense, but an aid for dealing with ambiguity in a criminal 
statute.”  Oglesby v. State, 441 Md. 673, 681 (2015).  However, it is not so much a canon 
of statutory construction as a “tool of last resort” when a court despairs of resolving an 
ambiguity in a statute with the usual tools of statutory construction.  Id.  That is not the 
case here.  As the analysis in the text demonstrates, the normal tools of statutory 
construction are adequate to the task at hand. 
 
51 The only authority cited by Nationstar for this proposition is an unpublished 
federal district court opinion that stated that an assignee does not “inherit the statutory 
obligations of the original lender, when such laws regulate the initial maker of the loan 
regardless of any contractual terms to the contrary.”  Flournoy v. Rushmore  Loan 
Management Services, LLC, 2020 WL 1285504 (D. Md. March 17, 2020) at *6 (emphasis 
in original).  That opinion did not cite any authority for this proposition, which would 
appear to open up the possibility that a lender could launder a loan agreement of unwanted 
statutory provisions incorporated in the agreement (i.e., restrictions imposed by the Usury 
42 
 
common law concerning assignment of mortgages does not support such a result.  And, the 
addition of a definition of “lender” as part of code revision did not change that law. 
Accordingly, we hold that Fannie Mae (and its agent Nationstar), as assignee of 
Countrywide, did not acquire any greater right to assess property inspection fees against a 
borrower like Ms. Kemp than Countrywide itself had under the deed of trust, which limited 
the authorization to charge fees prohibited by State law.52  Ms. Kemp has adequately pled 
causes of action based on a violation of CL §12-121. 
C. 
Whether the Complaint States a Claim under the MCDCA  
As outlined above, the complaint in this case includes a count that alleges a violation 
of CL §14-202(8) of the MCDCA, which would also constitute a violation of the Maryland 
 
Law) simply by assigning the loan.  That is not Maryland law.  See Post v. Bregman, 349 
Md. 142, 156 (1998) (“parties to a contract are deemed to have contracted with knowledge 
of existing law and … the laws which subsist at the time and place of the making of a 
contract … enter into and form part of it …”) (internal quotation marks omitted).  
Moreover, the Flournoy court did not take into consideration the context and history of the 
Maryland Usury Law or of Maryland common law concerning assignments of mortgage 
loans.  We do not adopt its rationale.   
 
52 In a similar vein, the loan modification instrument that Nationstar drafted and 
entered into with Ms. Kemp on behalf of Fannie Mae identifies Fannie Mae as the “lender” 
and uses that term throughout the document to refer to Fannie Mae’s rights and obligations 
under that agreement.  Whether this document is construed to mean that Fannie Mae has 
made a new loan as part of the loan modification or is the assignee of the originator of the 
original loan, it would appear to indicate that Fannie Mae (and its agent Nationstar) is 
subject to the restrictions on inspection fees either in its own right or as the assignee of 
Countrywide.  If there were any ambiguity in how the provisions in the deed of trust or the 
loan modification agreement should be construed, under ordinary contract principles, they 
would be construed against the drafters – in this case, Fannie Mae and Nationstar.  Impac 
Mortgage Holdings, Inc. v. Timm, ___ Md. ___, ___ (2021), 2021 WL 2965006 (July 15, 
2021) at *6. 
43 
 
Consumer Protection Act.  In its opinion, the Court of Special Appeals noted that some of 
its past opinions had held that claims under the MCDCA are limited to those concerning 
“methods” of debt collection, as opposed to the “validity” of the debt being collected.  The 
Court of Special Appeals held that the Circuit Court properly dismissed Ms. Kemp’s claim 
under the MCDCA because, in the view of the intermediate appellate court, that claim was 
addressed to the “validity” of the underlying debt (i.e., the property inspection fees), rather 
than the “method” by which Nationstar was attempting to collect that debt.  248 Md. App. 
at 35-38.53   
On appeal, Ms. Kemp contends that the MCDCA is not limited to “methods” of debt 
collection.  Nationstar takes the contrary position and further argues that, even if subsection 
(8) applies to its effort to collect the property inspection fees, Ms. Kemp failed to meet “her 
burden of alleging and proving that [Nationstar] had ‘knowledge’ that the right it threatened 
to enforce ‘did not exist.’”54  
 
 
 
53 We agree with the Court of Special Appeals that the Circuit Court’s conclusion 
that letters sent by Nationstar to Ms. Kemp did not constitute an attempt to collect a debt 
was dubious at best.  248 Md. App. at 33-35.  Nationstar has not pressed that argument 
before us. 
54 We note parenthetically that, at this stage of the case – appellate review of the 
grant of a motion to dismiss – a plaintiff bears no burden of “proving” a claim.  Rather, the 
complaint must allege facts that, if true, could prove the claim.  See Part III.A.1 of this 
opinion above. 
44 
 
1. 
Whether the MCDCA is Limited to “Methods” of Debt Collection  
The MCDCA prohibits a debt collector from engaging in certain conduct when 
“collecting or attempting to collect an alleged debt.”  The particular provision at issue 
before us is CL §14-202(8).  That subsection reads as follows: 
In collecting or attempting to collect an alleged debt a collector may not: … 
 
* 
 
* 
 
* 
 
* 
 
* 
(8) Claim, attempt, or threaten to enforce a right with knowledge that 
the right does not exist;… 
 
In an opinion issued today, we have recounted in some depth the origin and development 
of the “methods” versus “validity” distinction that appears in some prior cases, and 
particularly as it relates to an alleged violation of CL §14-202(8).  Chavis v. Blibaum & 
Associates, P.A., ___ Md. ___, ___  (2021), slip op. at 18-24.  In that opinion, we conclude 
that “the remedial nature of the MCDCA requires that we interpret § 14-202(8) broadly to 
reach any claim, attempt, or threat to enforce a right that a debt collector knows does not 
exist.”  Id. at ___, slip op. at 23 (citations omitted).  In particular, a plaintiff may invoke 
subsection (8) “when the amount claimed by the debt collector includes sums that the debt 
collector, to its knowledge, did not have the right to collect.”  Id. at ___, slip op. at 23-24. 
 
In this case, Ms. Kemp’s complaint alleged that Nationstar assessed property 
inspection fees against her and capitalized those fees into the mortgage debt that it is 
collecting from her under the loan modification agreement.  The complaint alleged, and we 
have held, that the assessment of such fees by the assignee of a mortgage loan (or a servicer 
on the assignee’s behalf) violates CL §12-121.  Thus, the complaint adequately alleges that 
Nationstar, as part of its debt collection efforts, is asserting that it has a right “that does not 
45 
 
exist.”  The remaining question is whether the complaint adequately alleges that Nationstar 
did so “with knowledge that the right does not exist.”  
2. 
The Knowledge Element of a Violation of the MCDCA 
The Circuit Court did not allude to the knowledge element of subsection (8) in 
justifying its dismissal of the MCDCA claim.  Nor did the Court of Special Appeals discuss 
the knowledge element of subsection (8) in its opinion explaining why it affirmed the 
dismissal of the MCDCA count on a different ground than the Circuit Court.  Perhaps for 
that reason, Ms. Kemp did not directly address the knowledge element in her cross-petition 
and briefs seeking reversal of the decision of the Court of Special Appeals on that count.55  
Nationstar did include a brief discussion of the knowledge element in its reply brief, 
although it urges us not to reach the issue in this case.56  Nationstar argues that, to succeed 
on a claim under subsection (8), a plaintiff must prove that the defendant acted “with 
knowledge of, or in ‘reckless disregard’ to, the existence of the ‘right.’”  Then, elaborating 
on that standard, Nationstar asserts that, while a debt collector could not negate the 
 
55 In her cross-petition and her briefs filed in this Court, Ms. Kemp argues that the 
Court of Special Appeals, in citing its prior decision in Chavis v. Blibaum Associates, P.A., 
246 Md. App. 517 (2020), erroneously introduced what she labels a “novel legal error 
defense” into the analysis under CL §14-202(8).  Her argument is difficult to follow; the 
portion of the Chavis opinion she cites for this proposition was not cited by the intermediate 
appellate court in this case and, in any event, does not relate directly to the MCDCA.  
Possibly, her argument relates to whether a mistake of law may negate a finding that a 
defendant had the “knowledge” required for a violation of subsection (8).  But neither the 
Circuit Court’s grant of the motion to dismiss the MCDCA claim nor the affirmance of that 
dismissal by the Court of Special Appeals relies on such a ground.   
56 This was one of Nationstar’s alternative arguments in response to Ms. Kemp’s 
argument, which is described in the previous footnote. 
46 
 
knowledge element simply by not becoming aware of “an obvious provision of law,” the 
collector could negate that element if the law is “unclear” and there is a “potentially 
…meritorious” argument in the collector’s favor.  As explained today in Chavis, we agree 
that the knowledge element is met when the law is settled, because the debt collector’s 
recklessness in failing to discover that law is the equivalent of knowledge.  Id. at ___, slip 
op. at 30-31.  However, we do not agree that the existence of a “potentially meritorious” 
argument as to the existence of the right necessarily negates knowledge.  As also explained 
in Chavis, the question whether a debt collector acted recklessly is a question of fact, to be 
determined in light of the particular circumstances.  Id. at ___, slip op. at 31, 33. 
In short, to adequately allege the requisite knowledge for purposes of subsection 
(8), a plaintiff must allege that the defendant either actually knew that it did not possess a 
right it claimed as part of its debt collection efforts, or recklessly disregarded the falsity of 
that claim.  Here, the complaint alleged that the deed of trust did not authorize the 
imposition of such a fee because it incorporated “Applicable Law,” including CL §12-121, 
which prohibits such an inspection fee.  The complaint also described, and attached as an 
exhibit, the 2014 advisory notice of the Maryland Commissioner of Financial Regulation 
to mortgage servicers like Nationstar.  That advisory notice, which did not distinguish 
mortgages that a servicer handled on behalf of a loan originator from those handled on 
behalf of an assignee (likely the vast majority of the mortgages handled by servicers as of 
2014), informed servicers that it was illegal to charge mortgage borrowers for property 
inspection fees.  Further, the advisory notice provided the example of a case involving a 
47 
 
mortgage serviced on behalf of an assignee.57  The complaint thus alleges that Nationstar 
had knowledge that it did not have the right to impose such a fee.58   
3. 
Summary 
The MCDCA applies to debt collectors who collect or attempt to collect a debt 
arising from a consumer transaction – that is, a transaction for “personal, family, or 
household purposes.”  CL §14-201(b)-(c).  There appears to be no dispute that Ms. Kemp’s 
mortgage loan is a consumer transaction within the purview of the statute.   
CL §14-202(8) prohibits the claim or attempt to enforce a “right” with knowledge 
that the alleged right does not exist.  We conclude that Ms. Kemp’s complaint alleged the 
elements of a claim under CL §14-202(8):  It alleged Nationstar’s claim of a right to assess 
a property inspection fee, the illegality of the fee that Nationstar claimed, and Nationstar’s 
knowledge that the right did not exist.  We therefore hold that Ms. Kemp adequately pled 
the elements of a cause of action under CL §14-202(8). 
IV 
Conclusion 
 
For the reasons set forth above, we hold:  
 
57 Taylor v. Friedman, 344 Md. 572 (1997), which is also described in Part III.B.5 
of this opinion. 
58 In asserting that the MCDCA count was properly dismissed at the pleading stage 
of this case, the Dissenting Opinion relies on the methods/validity distinction that this 
Court has rejected in Chavis and, with respect to the knowledge element of subsection (8), 
does not address the allegations in the complaint relevant to that element. 
48 
 
(1) The prohibition on charging inspection fees in CL §12-121 applies to an assignee 
of a mortgage loan, such as Fannie Mae, and a servicer, such as Nationstar.   
 
(2) The Second Amended Complaint adequately alleged that Nationstar attempted 
to collect the property inspection fees by asserting that it had a right to assess those fees 
against Ms. Kemp, with knowledge that such a right did not exist, in violation of CL §14-
202(8). 
 
 
JUDGMENT OF THE COURT OF SPECIAL APPEALS AFFIRMED IN 
PART AND REVERSED IN PART.  COSTS TO BE PAID BY 
PETITIONERS/CROSS-RESPONDENTS.  
 
 
Circuit Court for Montgomery County 
Case No. 441428V 
Argument: March 5, 2021 
 
 
IN THE COURT OF APPEALS 
 
OF MARYLAND 
 
No. 43 
 
September Term, 2020 
 
__________________________________ 
 
NATIONSTAR MORTGAGE LLC D/B/A/ MR. 
COOPER, ET AL. 
 
 
 
 
V. 
DONNA KEMP 
___________________________________ 
 
Barbera, C.J., 
McDonald, 
Watts, 
Hotten, 
Getty, 
Booth, 
Biran, 
 
JJ. 
__________________________________ 
 
Dissenting Opinion by Getty, J. 
__________________________________ 
 
 
Filed: August 27, 2021 
 
 
 
 
Respectfully, I dissent.  While the Majority delineates a clear and concise path for 
applying the Maryland usury statutes to the facts of this case, I believe that they are 
following the wrong path in interpreting the relevant statutes here.  The Majority grounds 
its interpretation of the usury statutes in the “longstanding common law rule that an 
assignee of a loan succeeds to the same rights and limitations as its assignor[.]”  Maj. Slip 
Op. at 29.  However, the General Assembly, in enacting Md. Code (1975, 2013 Repl. Vol.), 
Com. Law (“CL”) § 12-101(f) and Md. Code (1975, 2013 Repl. Vol.), Com. Law (“CL”) 
§ 12-121 did not abrogate the common law and we need not look to the common law rules 
of assignment to determine whether the General Assembly’s plainly stated language 
incorporates assignees of a mortgage lender.  Nationstar Mortgage LLC (“Nationstar”) and 
the Federal National Mortgage Association (“Fannie Mae”),1 as assignees of the mortgage 
originator, Countrywide, received the exact same rights under the deed of trust in this case, 
i.e. the rights permitted by applicable law as set forth by the plain language of the relevant 
statutory provisions. 
 Given that assignees of a “lender” are omitted from the definition of the word 
“lender” in CL § 12-101(f) and from the language concerning the prohibition on inspection 
fees in CL § 12-121, I would rely on the unambiguous plain language and the clearly stated 
intent of the General Assembly in defining a “lender” at the time the consumer protection 
statutes were enacted.  Accordingly, I would hold that the Circuit Court for Montgomery 
County did not err in granting Nationstar’s and Fannie Mae’s motion to dismiss.     
 
1 We sometimes refer to Nationstar and Fannie Mae collectively as “the Petitioners.” 
   
2 
 
In affirming the Court of Special Appeals below, the Majority determined that the 
word “lender” in CL § 12-121 includes actors within the secondary mortgage market that 
do not make loans (the “inspection fee issue”).  However,  the word “lender,” as it was 
defined in CL § 12-101(f)2 during the circuit court’s proceedings, included only “a person 
who makes a loan” and was enacted before the proliferation of the secondary mortgage 
industry.3  Just as the Court of Special Appeals did, the Majority looks past the 
unambiguous plain language of the usury statutes and the history of the secondary 
mortgage market in determining that, even though Nationstar and Fannie Mae do not make 
loans, they are subject to the prohibition on inspection fees in CL § 12-121.  Kemp v. 
Nationstar Mortg. Ass’n, 248 Md. App. 1, 8 (2020) (holding that the circuit court’s 
interpretation of the usury statutes “would defeat the broader statutory purpose and lead to 
absurd results[.]”); Maj. Slip Op. at 33 (“[T]his Court . . . warned against an interpretation 
of the statute that would lead to absurd . . . consequences.  [S]uch consequences would 
ensue if the Court were to construe the 1975 code revision to have both abrogated the 
common law rule that an assignee succeeds to the same rights and obligations as its 
assignor and substantially narrowed the scope of the Usury Law.” (internal quotation marks 
omitted)).   
 
2 We sometimes refer to CL § 12-101(f) and CL § 12-121 collectively as the “usury 
statutes.” 
 
3 CL § 12-101(f) was amended in 2018 to read: “‘Lender’ means a licensee or a person 
who makes a loan subject to this subtitle.”  For the purposes of this opinion, unless stated, 
any citation to the definition of “lender” in CL § 12-101(f) refers to the pre-2018 definition. 
  
3 
 
I also dissent from the Majority’s decision to reverse the Court of Special Appeals’ 
holding regarding Donna Kemp’s Maryland Consumer Debt Collection Act (“MCDCA”) 
claim (the “MCDCA issue”).  The Court of Special Appeals correctly affirmed the circuit 
court’s judgment dismissing Ms. Kemp’s claim under the MCDCA because Md. Code 
(1975, 2013 Repl. Vol.), Com. Law (“CL”) § 14-202 provides a cause of action for a 
plaintiff to recover for improper methods of debt collection—not an avenue to challenge 
the validity of an underlying debt.  Moreover, even if CL § 14-202 provides a cause of 
action to challenge the validity of an underlying debt, the Petitioners did not have the 
“knowledge” required to be held liable under the statute.  For the reasons below, I would 
reverse the judgment of the Court of Special Appeals on the inspection fee issue and affirm 
that court’s judgment upholding the dismissal of Ms. Kemp’s MCDCA claim. 
The circuit court applied a common-sense plain language interpretation of the 
relevant statutes in this case and determined that “[t]he problem with the plaintiff’s theory 
of the case . . . is that the facts alleged, even if true, do not fit the applicable statute under 
which [Ms. Kemp] has sued.”  Kemp v. Seterus, Inc., No. 441428-V, at 9 (Montgomery 
Cty. Cir. Ct. Oct. 22, 2018) (memorandum and order granting Defendants’ motion to 
dismiss).  In dismissing Ms. Kemp’s inspection fee claim, the circuit court’s plain language 
interpretation of the usury statutes comports with the General Assembly’s clearly stated 
intent, and the circuit court adopted an interpretation articulated by numerous federal courts 
and supported by the relevant legislative history.   
 
 
 
4 
 
 The plain language of CL § 12-101(f) and CL § 12-1214 is unambiguous, therefore 
our analysis begins with the text of the statutes.  We then look to the history of the usury 
statutes, which supports the circuit court’s statutory interpretation in two ways.  First, the 
history of the secondary mortgage industry confirms that the General Assembly did not 
intend for the definition of “lender” to include mortgage assignees that do not make loans 
when it enacted the definitions for the interest and usury subtitle in 1975.  Second, in 
looking to Taylor and Thompkins, the Court of Special Appeals incorrectly ignored the 
legislative history of CL § 12-121.  We lastly turn to Ms. Kemp’s MCDCA claim which, 
like her inspection fee claim, was properly dismissed by the circuit court for failing to state 
a claim upon which relief could be granted. 
A. 
Ms. Kemp’s Inspection Fee Claim Was Properly Dismissed by the Circuit Court.  
1. 
The Majority Improperly Overlooks the Unambiguous Plain Language of the 
Usury Statutes. 
 
The Majority improperly overlooks the plain language of the usury statutes in 
determining that the term “lender” in CL § 12-121, as it is defined in § 12-101(f), includes 
secondary mortgage purchasers like Fannie Mae and mortgage servicers like Nationstar.  
The Majority’s interpretation of the usury statutes, like that of the Court of Special Appeals, 
conflicts with the clear intent of the General Assembly in enacting CL §§ 12-101(f) and 
12-121.  Contrary to the Majority’s reasoning, I believe that the General Assembly plainly 
 
4 For ease of reading and clarity, I refer to the sections and subsections of the bills and 
statutes involved directly as such—i.e. “§ 12-101(f)”—instead of providing the full citation 
of CL § 12-101(f). 
5 
 
indicated in the text of §§ 12-101(f) and 12-121 that actors within the secondary mortgage 
market who do not make loans are not “lenders” under Subtitle 1 of Title 12.   
 
This Court’s rules of statutory interpretation are well defined.  We begin—and often 
end—with the plain language of the statute, of which “ordinary, popular understanding of 
the English language dictates” our interpretation.  Johnson v. State, 467 Md. 362, 372 
(2020) (quoting Blackstone v. Sharma, 461 Md. 87, 113 (2018)).  In deferring “to the policy 
decisions enacted into law by the General Assembly[,]” we read the “statute as a whole to 
ensure that no word, clause, sentence or phrase is rendered surplusage, superfluous, 
meaningless or nugatory.”  Town of Forest Heights v. Md.-Nat’l Cap. Park & Plan. 
Comm’n, 463 Md. 469, 478 (2019) (quoting Brown v. State, 454 Md. 546, 550–51 (2017)).  
“If the words of the statute, construed according to their common and everyday meaning, 
are clear and unambiguous and express a plain meaning, we will give effect to the statute 
as it is written.”  Fangman v. Genuine Title, LLC, 447 Md. 681, 691 (2016) (quoting 
Montgomery Cty. v. Phillips, 445 Md. 55, 62 (2015)). 
 
The definitional section for the interest and usury subtitle of Title 12, Subtitle 1, was 
enacted during the recodification of the Commercial Law Article in 1975 and provides 
definitions for the actors that are referenced throughout the subtitle (i.e., “borrower,” 
“lender,” and “person”):  
(a) In this subtitle the following words have the meanings indicated. 
(b) “Borrower” means a person who borrows money under this subtitle. 
 
 
 
 
* * * 
(f) “Lender” means a person who makes a loan under this subtitle. 
(g) “Person” includes an individual, corporation, business trust, statutory 
trust, estate, trust, partnership, association, two or more persons having a 
joint or common interest, or any other legal or commercial entity. 
6 
 
 
CL § 12-101(a), (b), (f), (g) (emphasis added).  This section was updated in 2018 to include 
definitions for “licensee” and “loan,” while adding licensees to the definition of “lender.”5  
See 2018 Md. Laws, ch. 732.   
The inspection fee statute at issue here, § 12-121, was enacted in 1986 in response 
to the Report of the Task Force on Real Property Closing Costs that was created by 
Governor Harry R. Hughes.  See Taylor v. Friedman, 344 Md. 572, 579 (1997).  Section 
12-121 was enacted for the purpose of “prohibiting imposition of a lender’s inspection fee 
under certain circumstances” and reads:  
(a) In this section, the term “lender’s inspection fee” means a fee imposed 
by a lender to pay for a visual inspection of real property. 
(b) Except as provided in subsection (c) of this section, a lender may not 
impose a lender’s inspection fee in connection with a loan secured by 
residential real property. 
(c) A lender’s inspection fee may be charged if the inspection is needed to 
ascertain completion of: 
 
5 The new language in § 12-101 included: 
  
(g) “Licensee” means a person that is required to be licensed to make loans 
subject to this subtitle, regardless of whether the person is actually licensed. 
(h)(1) “Loan” means a loan or an advance of money or credit subject to this 
subtitle, regardless of whether the loan or advance of money or credit is or 
purports to be made under this subtitle. 
(h)(2) “Loan” does not include: 
(i) A loan or advance of money or credit subject to Subtitle 3 of this 
title, unless made under § 12-101.1 of this subtitle; 
(ii) A plan or loan for which a written election is made under Subtitle 
4, Subtitle 4, Subtitle, 9, or Subtitle 10 of this title; or 
 
(iii) An installment sale agreement as defined in § 12-601 of this title. 
 
CL § 12-101(g), (h).  As described in footnote 3, supra, “licensee” was added to the 
definition of “lender” in 2018 to read: “‘Lender’ means a licensee or a person who makes 
a loan subject to this subtitle.”  CL § 12-101(f) (emphasis denoting additions to the 
definition).     
7 
 
(1) Construction of a new home; or 
(2) Repairs, alterations, or other work required by the lender. 
(d) This section does not apply to an appraisal of the value of real property 
by a lender or to fees imposed in connection with an appraisal. 
 
CL § 12-121; see 1986 Md. Laws, ch. 628 (emphasis added).   
In looking to the plain language of § 12-121, the circuit court recognized that Ms. 
Kemp’s amended complaint “[did] not allege that either [Nationstar] or Fannie Mae made 
any of the loans in question[], or even make[] any loans in general, within the meaning of 
Section 12-101.”  Kemp, No. 441428-V, at 9 (Montgomery Cty. Cir. Ct. Oct. 22, 2018) 
(memorandum and order granting Defendants’ motion to dismiss).  The circuit court 
accurately concluded that “[j]ust as alchemy cannot transform lead into gold, Fannie Mae’s 
purchase of [Ms.] Kemp’s loan from Countrywide does not make Fannie Mae a lender 
under the statute.”  Id.  Although the Court of Special Appeals disagreed with the circuit 
court’s dismissal of Ms. Kemp’s claim, it agreed with the circuit court’s plain language 
interpretation of the usury statutes and, contrary to its holding, stated that “it appears that 
the legislative intent was to limit ‘lenders’ to those entities who originate loans.”  Kemp, 
248 Md. App. at 21.   
Here, the Majority ignores the unambiguous text of the usury statutes in surmising 
that, collectively, the provisions of the Usury Law “suggest that the term ‘lender’ includes 
not only an originator of a loan but also an assignee.”  Maj. Slip. Op. at 26.  This broad 
proclamation is illogical given the General Assembly’s differentiation between mortgage 
market actors in its enactments, and impermissibly renders references to “assignees” and 
“mortgage servicers” throughout the Usury Law surplusage.  Town of Forest Heights, 463 
8 
 
Md. at 478 (quoting Brown, 454 Md. at 551) (Our statutory analysis “ensure[s] that no 
word, clause, sentence or phrase is rendered surplusage, superfluous, meaningless or 
nugatory.”).      
After finding ambiguity where none exists, the Majority sees fit to extensively detail 
the legislative history of the usury statutes and paint the Petitioners’ position as illogical.  
See Maj. Slip. Op. at 26–33.  Although Maryland courts occasionally “see fit to examine 
extrinsic sources of legislative intent” to check their plain language understanding of a 
statute, the Majority uses the legislative history as a bridge to avoid the unambiguous plain 
language enacted by the General Assembly.  Phillips v. State, 451 Md. 180, 197 (2017) 
(quoting Douglas v. State, 423 Md. 156, 178 (2011)).  Like the Court of Special Appeals 
below, the Majority improperly cherry-picks parts of the relevant legislative history and 
relies heavily on the existence of sister provisions in the Usury Law to reach its 
interpretation.  In situations such as this, where the General Assembly’s intent is clear by 
its plain language, such an approach is antithetical to our fundamental rules of statutory 
interpretation.  The contextual circumstances of a statute should not be used to contravene 
the General Assembly’s plainly stated intent, nor should undue weight be put on the 
relevant legislative history to buttress an atextual interpretation of the usury statutes.  
Indeed, every federal district court that has addressed the applicability of § 12-121 
to assignees of a mortgage originator has recognized the unambiguous intent of the General 
Assembly based on the plain language of the statute.  Most recently, in Flournoy v. 
Rushmore Loan Management Services, LLC, the United States District Court for the 
District of Maryland considered a number of claims alleging that Rushmore Loan 
9 
 
Management Services (“Rushmore”) violated the MCDCA and the Maryland Consumer 
Protection Act (“MCPA”) by illegally imposing inspection fees in violation of CL § 12-
121.  2020 WL 1285504, at *3 (D. Md. Mar. 17, 2020).  In considering the plaintiffs’ 
claims, the court was required to determine whether Rushmore, among other defendants, 
was a “lender” under CL § 12-121 when it did not make loans, but rather purchased them 
on the secondary mortgage market.  Id. at *5.  
 In looking to “fundamental principles of statutory construction,” the court found 
that “[t]he plain language of the Usury Statute[] specifically, and unambiguously, 
announces that ‘lender means a person who makes a loan under this subtitle.’”  Id. 
(emphasis in original) (quoting CL § 12-101(f)).  The court explained that  
[t]he meaning of “makes a loan” is clear: a person who “makes” a loan 
creates the loan itself.  Viewing the complaint facts as true and most 
favorably to Plaintiffs, Defendants certainly acquire the loan once made, and 
thereafter service, and maintain the loan, but they do not play any role in 
making the loan.   
 
Id. (emphasis in original).   
The court characterized its interpretation of § 12-121 as “predictabl[e]” based on 
three previous federal district court decisions that all reached the same result.  Id.; see Roos 
v. Seterus, Inc., 2019 WL 4750418, at *4 (D. Md. Sept. 30, 2019) (“The plain language of 
the statute, which is clear and unambiguous, states that ‘a lender may not impose a lender’s 
inspection fee . . . .’” (emphasis in original)); Robinson v. Fay Servicing, LLC, 2019 WL 
4735431, at *9 (D. Md. Sept. 27, 2019) (“A ‘lender’ under the statute is defined as ‘a person 
who makes a loan under this subtitle.’  The Amended Complaint does not allege that any 
of the [d]efendants make loans.” (citation omitted)); Suazo v. U.S. Bank Trust, NA, 2019 
10 
 
WL 4673450, at *10 (D. Md. Sept. 25, 2019) (“The inspection fee statute does not 
otherwise include assignees within its ambit.”).  The issue in this case is no different than 
those considered in the federal district court decisions cited above and should be resolved 
by looking to the unambiguous text of the statutory provisions.       
Much like the plaintiffs in the cases discussed above, Ms. Kemp seeks to have this 
Court recognize a right of action against assignees of a mortgage originator when (1) the 
plainly stated intent of the General Assembly demonstrates that none exists; and (2) her 
amended complaint fails to allege that the Petitioners in this case make loans.  In 
recognizing such a cause of action, this Court signals that it is willing to look past the 
unambiguous plain language of a statute even when, at best for Ms. Kemp’s case, the 
legislative history is inconclusive as to whether the General Assembly considered assignees 
when it enacted § 12-101(f).  See Lockshin v. Semsker, 412 Md. 257, 275 (2010) (“We 
neither add nor delete language so as to reflect an intent not evidenced in the plain and 
unambiguous language of the statute, and we do not construe a statute with ‘forced or subtle 
interpretations’ that limit or extend its application.” (citation omitted)).   
I disagree with the Majority’s interpretation of §§ 12-101 and 12-121 and instead 
am in agreement with the various federal courts that have found that the text of the usury 
statutes unambiguously indicates the intent of the General Assembly that the word “lender” 
pertains only to one who makes loans.  This Court’s plain language analysis first requires 
us to determine what the General Assembly meant when it used the word “makes,” i.e., “a 
person who makes a loan,” in § 12-101(f).  Ms. Kemp seeks to have the Court define 
“makes”—in the context of mortgage loans—to include those who provide liquidity for 
11 
 
primary mortgage originators by purchasing loans on the secondary mortgage market.  But 
such an expansive definition of the word “makes” is at odds with its ordinary meaning.  
Merriam-Webster defines “make” as “to bring into being by forming, shaping, or altering 
material.”  Make, Merriam-Webster, https://www.merriam-webster.com/dictionary/make 
[https://perma.cc/6U43-RJ83].  While we recognize that our statutory analysis is not 
confined to “putting the [text] under [a] microscope . . . with a dictionary [in] hand,” this 
definition suggests that the General Assembly intended to include only those mortgage 
originators that bring mortgage loans “into being” on the primary mortgage market.6  Maj. 
Slip Op. at 20.  
Thus, it is difficult to reconcile the dictionary definition of “make” with Ms. Kemp’s 
preferred interpretation because Nationstar and Fannie Mae did not bring Ms. Kemp’s loan 
“into being.”  Nationstar (as a successor to Seterus) only serviced Ms. Kemp’s existing 
loan.  It did not originate her mortgage loan or purchase it on the secondary market.  Fannie 
Mae, who only purchased Ms. Kemp’s mortgage on the secondary market, is barred by 
federal law from originating mortgage loans.  See 12 U.S.C. § 1719(a)(2) (“The corporation 
shall not be permitted to use its lending authority . . . to originate mortgage loans.”).  Hence, 
the unambiguous plain language of the statute controls the outcome of this case.  Because 
neither entity “makes” loans under § 12-101(f), the circuit court correctly interpreted the 
 
6 We understand that a strict, plain-language reading of § 12-101(f) as it was intended at 
the time that the statute was enacted in 1975 might run contrary to the modern policy 
aversion to inspection fees.  However, we explain more fully infra why this plain language 
understanding of the statute comports with the legislative history and why the Majority’s 
interpretation of the language runs contrary to the legislature’s understanding of the 
secondary mortgage market when § 12-101(f) was enacted in 1975. 
12 
 
language of the usury statutes and determined that the Petitioners did not allege facts that 
state a cognizable claim under § 12-121. 
In addition to the plain language of § 12-101(f), the plain language of § 12-121 
fortifies the conclusion that the General Assembly either declined to include assignees 
within the ambit of the prohibition on inspection fees or failed to update the language of 
the statute to reflect the state of the secondary mortgage market.  The General Assembly 
could have easily updated the definition of “lender” in § 12-101(f) to include assignees.  
Moreover, the General Assembly could have inserted language including assignees directly 
into the text of § 12-121.  These are policy determinations made by the General Assembly.  
It is not the role of this Court to speculate as to what policy decision the General Assembly 
sought to implement when the plain language of § 12-121 unambiguously spells it out for 
us.  
 Section 12-121 was enacted in 1986 and was proposed as legislation in response to 
the 1986 Report of the Task Force on Real Property Closing Costs, which made “seven 
major recommendations to reduce Maryland’s substantial closing costs.”  See Task Force 
on Real Property Closing Costs, 1986 Report (Jan. 1986).7  The language ultimately 
enacted by the General Assembly is devoid of any reference to “assignees” of a mortgage 
originator.  The history of the secondary mortgage industry suggests that the General 
Assembly did not intend to include assignees in the definition of a “lender” when it enacted 
§ 12-101(f), and the General Assembly was well aware of the scope of the secondary 
 
7 The 1986 Report of the Task Force on Real Property Closing Costs is available in the 
archives of Maryland task force reports at the Thurgood Marshall State Law Library.   
13 
 
mortgage market when it enacted § 12-121 in 1986.  Indeed, at the time that § 12-121 was 
enacted, the General Assembly frequently used different terms to differentiate between 
actors in the primary and secondary mortgage industries.  For example, the legislature 
included “assignee” to the definition of “lender” in Md. Code (1975, 2013 Repl. Vol.), 
Com. Law (“CL”) § 12-109.2, which only applies for the purposes of that section,8 and was 
enacted on the same day as § 12-121.  See CL § 12-109.2(a)(3) (defining “Lender” as 
“includ[ing] a lender and assignee of a lender.” (emphasis added)); see 1986 Md. Laws, 
ch. 628.   
This Court has explicitly stated that when the “legislature uses different words . . . 
it usually intends different things.”  Toler v. Motor Vehicle Admin., 373 Md. 214, 223 
(2003); see also Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of 
Legal Texts 170 (2012) (“[A] material variation in terms suggests a variation in meaning.”).  
The General Assembly similarly included mortgage servicers within the definition of 
“mortgage lender” in 1989 when it enacted § 11-501(j)(1) of the Financial Institutions 
 
8 Section 12-109.2(a)(3) defines “lender” only for the purposes of the following 
prohibitions on handling escrow accounts: 
 
(b)(1) Funds in any escrow account shall be kept separate from and may not 
be commingled with the funds of the lender. 
(2) A lender may place escrow funds received in connection with 
more than one mortgage into a single escrow account. 
(3) In the event of the bankruptcy of the lender, any escrow funds 
placed in any escrow account under this section may not be 
considered to be part of the bankrupt estate of the lender. 
(c) A lender may not impose a collection fee or service charge on the 
maintenance of an escrow account on a first mortgage. 
   
CL § 12-109.2(b), (c). 
14 
 
Article.  Md. Code. (1980, 2020 Repl. Vol.), Fin. Inst. (“FI”) § 11-501(j)(1); see 1989 Md. 
Laws, ch. 476.  Section 11-501 of the Financial Institutions Article defines “[m]ortgage 
lender” to “mean[] any person who: (i) [i]s a mortgage broker; (ii) [m]akes a mortgage loan 
to any person; or (iii) [i]s a mortgage servicer.”  FI § 11-501(j)(1) (emphasis added).  This 
language, as well as that used in CL § 12-109.2, demonstrates that the General Assembly 
knew how to differentiate between mortgage originators, assignees, and servicers when it 
enacted § 12-121.  If the General Assembly had intended to include assignees of a mortgage 
originator or mortgage servicers within the prohibition on inspection fees in § 12-121, 
undoubtedly, it would have explicitly done so.  
Just as the General Assembly did in enacting CL § 12-109.2 and FI § 11-501(j)(1), 
it could have included assignees and mortgage servicers within the ambit of the inspection 
fee statute by identifying them in the language of § 12-121 or by amending the definition 
of “lender” in § 12-101(f).  The General Assembly did neither and this Court is now tasked 
with interpreting two statutes that make no reference whatsoever to assignees of a mortgage 
originator.  When we are presented with unambiguous statutory language, it is our role to 
apply the unambiguous text by interpreting what the General Assembly intended at the 
time that the statute was enacted.  See Scalia & Garner, supra at 78 (“Words must be given 
the meaning they had when the text was adopted.”); see also United States v. Rabinowitz, 
339 U.S. 56, 70 (1950) (Frankfurter, J., dissenting) (“Words must be read with the gloss of 
the experience of those who framed them.”). 
In our first opportunity to directly address whether assignees are included within the 
definition of “lender” in § 12-101(f), the Majority conclusively determines that assignees 
15 
 
who did not make Ms. Kemp’s loan are entities “who make[] a loan” under Subtitle 1 of 
Title 12.  Maj. Slip. Op. at 26.   The Majority makes this determination even though the 
General Assembly (1) did not include assignees within the definition of “lender” in § 12-
101(f); and (2) only provided that a “lender” is subject to § 12-121.  Based on the General 
Assembly’s differentiation between different mortgage actors in its enactments, the plain 
language of the usury statutes indicates that the General Assembly intended only to include 
mortgage originators and would have updated the statute had it intended otherwise.  The 
correct course of action for the Court is to apply the text as it is written, while alerting the 
General Assembly “that there may be compelling policy reasons” to treat mortgage 
assignees the same as those who make loans and are subject to the inspection fee statute.  
See In re S.K., 466 Md. 31, 57 (2019).  For now, the circumstance is that in spite of 
compelling policy reasons that may exist in today’s mortgage market, the legislative history 
makes it clear that, although the General Assembly understood that mortgages were subject 
to assignment, it did not deem it necessary to include assignees who do not make loans in 
the language of §§ 12-101(f) and 12-121.   
B. 
The History of the Secondary Mortgage Market in 1975 Confirms the Circuit 
Court’s Plain Language Interpretation of Subsection 12-101(f).   
   
As stated above, the definitional section of the usury and interest subtitle, § 12-101, 
was added in 1975 as a part of the recodification of Maryland’s commercial laws into the 
Commercial Law Article.  See 1975 Md. Laws, ch. 49.  Subsection 12-101(f), as it was 
drafted in House Bill 26 and enacted in 1975, defined “lender” as “a person who makes a 
loan under this subtitle.”  Id.  The chapter laws for subsection 12-101(f) include a Revisor’s 
16 
 
Note that reads: “This subsection is new language added to indicate that, in this subtitle, 
the term ‘lender’ relates only to a person who makes a loan under the provisions of this 
subtitle and not, for example, under any other credit law.”  Id.  A second Revisor’s Note 
that accompanied chapter 49 uses similar language to explain that a “borrower” “relates 
only to a person who borrows money” under subtitle 1 of Title 12.  Id.       
The provisions of House Bill 26 were enacted before the General Assembly began 
retaining bill files in 1976, and the legislative history for enactments prior to that year is 
typically sparse.9  Notwithstanding the inclusion of the Revisor’s Notes, House Bill 26 is 
no different.  The Fiscal and Policy Note for the bill focuses on its broad purpose, which 
was to “revise, restate, and recodify the laws of this State relating and pertaining to 
commercial and related transactions and activities[.]”  Fiscal and Policy Note for H.B. 26 
(1975).  The Court of Special Appeals and the Majority contend that the Revisor’s Note to 
the definition of “lender” demonstrate that the General Assembly’s purpose in enacting 
this definition was to differentiate between lenders who make loans under Subtitle 1, rather 
than other subtitles of Title 12.  But while the Revisor’s Note may be indicative of the 
 
9 See Waterman Fam. Ltd. P’ship. v. Boomer, 456 Md. 330, 341–42 (2017) (“The key 
provisions of the statute were enacted before the General Assembly began to retain bill 
files in 1976 and thus we do not have the benefit of the types of legislative materials that 
are available for more recent legislation.”).  Comprehensive legislative bill files were 
generally hit-or-miss from 1976 to 1995, and “the volume of [legislative history] materials 
varie[d] markedly from one bill to another[.]”  Jack Schwartz & Amanda Stakem Conn, 
The Court of Appeals at the Cocktail Party: The Use and Misuse of Legislative History, 54 
Md. L. Rev. 432, 441 (1995).  The Maryland General Assembly’s website first debuted in 
1996 and has provided a more comprehensive record of legislative history documents 
including the bills, amendments, roll call votes, and fiscal and policy notes for each bill.  
See Maryland Department of Legislative Services, Under the Dome: The Maryland 
General Assembly in the 20th Century, 264–66 (2001).   
17 
 
General Assembly’s purpose in adding the definition of “lender” to Subtitle 1, it does not 
unquestionably confirm the Majority’s reading of the statute. 
This is particularly so in light of the status of the secondary mortgage industry in 
the year that House Bill 26 was enacted by the General Assembly.  The Majority spends 
considerable time and relies heavily on the common law premise that an assignee of a loan 
takes no greater rights than the assignor.  See Maj. Slip Op. at 5, 22, 29 (“[U]nder 
Nationstar’s argument, the Legislature implicitly abrogated the longstanding common law 
rule that an assignee of a loan succeeds to the same rights and limitations as its 
assignor[.]”).  The Majority correctly notes that “[i]t has long been understood that a 
mortgage may be assigned.”  Maj. Slip Op. at 5.  The Majority is also correct in pointing 
out that “[u]nder the common law, an assignee generally has the same rights and 
responsibilities as its assignor.”  Id. (citing Univ. Sys. of Md. v. Mooney, 407 Md. 390, 411 
(2009)).   
The Majority’s focus on these points, however, is a red herring.  The General 
Assembly did not abrogate the common law understanding of an assignee’s rights in 
enacting § 12-101(f).  Nor does interpreting the plain language of that section as only 
applying to mortgage originators impliedly abrogate the common law.  Fannie Mae and 
Seterus (now Nationstar), as Fannie Mae’s agent, received the exact same rights under the 
deed of trust as were afforded to the original mortgagor, Countrywide.  Ms. Kemp’s deed 
of trust provided:  
Lender may charge Borrower fees for services performed in connection with 
Borrower’s default, for the purpose of protecting Lender’s interest in the 
Property and rights under this Security Instrument, including, but not limited 
18 
 
to, attorneys’ fees, property inspection and valuation fees.  In regard to any 
other fees, the absence of express authority in this Security Instrument to 
charge a specific fee to Borrower shall not be construed as a prohibition on 
the charging of such fee.  Lender may not charge fees that are expressly 
prohibited by this Security Instrument or by Applicable Law.   
 
(Emphasis added).  These are the rights, or parameters, that applied first to Countrywide, 
and later to Fannie Mae and Nationstar.  Included in these rights was the requirement that 
the mortgagor not act in a way that is “expressly prohibited by” the deed of trust or 
“[a]pplicable [l]aw,” which includes the usury laws.  Just because the “[a]pplicable [l]aw, 
or statutory rights of the assignees in this case differed from that applicable to Countrywide 
does not mean that the rights assigned to Fannie Mae and Nationstar under the deed of trust 
were any different than those originally granted to Countrywide.  All parties involved with 
Ms. Kemp’s mortgage—Countrywide, Fannie Mae, or Nationstar as Fannie Mae’s agent—
had the same right to charge any fee that was not expressly prohibited by the deed of trust 
or the usury statutes, i.e., applicable law.  
While deeds of trust have long been assignable under Maryland law, and while 
assignees may generally only receive equal rights to the assignor, the be-all-and-end-all 
here is the text of the usury statutes and the General Assembly’s intent in enacting §§ 12-
101(f) and 12-121.  In its interpretation, the Majority failed to consider the nascent origins 
of the modern secondary mortgage industry in the mid-1970s, which inform the 
interpretation of the statute’s text and failed to consider whether the issue presented in this 
case would have even been on the General Assembly’s radar at the time.   
Although a small secondary mortgage market existed at that time, the current state 
of the secondary mortgage market and the use of drive-by inspections by secondary 
19 
 
mortgage actors could not have been contemplated by the General Assembly.  Thus, an 
exploration of the history of the secondary mortgage market is of assistance in determining 
the intent of the General Assembly when it determined the definition of a “lender” in § 12-
101(f).   
As a threshold matter, this Court explained how the secondary mortgage market 
operates in Blackstone v. Sharma.  461 Md. 87, 137 (2018).  The modern “‘mortgage 
marketplace,’ or ‘mortgage industry’ encompasses a ‘primary and secondary mortgage 
market’ that requires securitization.”  Id. (quoting Robin Paul Malloy, Mortgage Market 
Reform and the Fallacy of Self-Correcting Markets, 30 Pace L. Rev. 79, 82 (2009)).  The 
primary mortgage market includes lenders who provide home loans to consumers in the 
marketplace, often with the intent to “sell the mortgages that they originate” to enhance 
liquidity (to make more loans and offer more attractive loan products) and reduce risk (by 
diversifying their investment portfolio).  Id. (quoting Malloy, supra at 95).  Entities that 
participate in the secondary mortgage market “buy and sell loans and loan participations, 
as well as package loans into pools for securitization[,]” which involves investment banks 
bundling together groups of purchased mortgages into a “special purpose vehicle” of which 
the income rights are sold to other investors.  Id. at 137–38 (emphasis omitted) (quoting 
Malloy, supra at 96) (quoting Anderson v. Burson, 424 Md. 232, 237 (2011)).   
With this background in mind, it is important to recognize that the robust secondary 
mortgage market that exists today did not exist in 1975.  The process of obtaining a 
mortgage when the definition of “lender” in § 12-101(f) was enacted by the General 
Assembly involved obtaining a conventional mortgage loan from a local financial 
20 
 
institution, such as a savings and loan company or bank, and generally “made the price of 
a new home unaffordable for many families.”  Peter M. Carrozzo, Marketing the American 
Mortgage: The Emergency Home Finance Act of 1970, Standardization and the Secondary 
Market Revolution, 39 Real. Prop. Prob. & Tr. J. 765, 769 (2005).  The mortgages provided 
by neighborhood banks and savings institutions were financed by money deposited by 
community members into those institutions.  Id. at 766 (citing Michael H. Schill, The 
Impact of the Capital Markets on Real Estate Law and Practice, 32 J. Marshall L. Rev. 
269, 270 (1999)).  The mortgage money available to the community, therefore, was directly 
connected to the amount of savings provided to local banks by members of the community, 
and each mortgage was held in the local bank’s portfolio until the property was sold.  Id.  
Because mortgage money was scarce and dependent on money held in local banks, “higher 
interest rates for borrowers, greater difficulty in obtaining loans, and ultimately, a 
depressed real estate market” were the norm.  Id.          
 
Despite the longstanding local nature of the mortgage lending industry, a secondary 
mortgage market that included the securitization of conventional mortgage loans did not 
mature until the 1970s.  See Alan J. Blocher, Due-On-Sale in the Secondary Mortgage 
Market, 31 Cath. U. L. Rev. 49, 49 (1981).  Although conventional mortgage loans were 
not sold on the secondary market until the 1970s, the federal government began backing 
locally originated mortgages beginning in the 1930s.  Specifically, the origin of the 
secondary mortgage market stems from creation of the Federal Housing Administration 
(“FHA”) by Congress in 1934.  Robin Paul Malloy, The Secondary Mortgage Market—A 
Catalyst for Change in Real Estate Transactions, 39 Sw. L. J. 991, 992 (1986) (citing P. 
21 
 
Goldstein, Real Estate Transactions–Cases and Materials on Land Transfer, Development 
and Finance 308–09 (1981)).   
At that time, Congress directed the FHA, and later the Veterans Administration 
(“VA”),10 to develop mortgage insurance programs that provided security—specifically, a 
guaranteed means of repayment—for local mortgage originators.  Id. at 992–93.  
Notwithstanding these programs, only a small proportion of mortgages consisting of FHA 
and VA loans were insured by government agencies.  Id. at 993.  Four years after the 
creation of the FHA, in 1938, Congress created Fannie Mae to advance a variety of policy 
goals aimed at providing liquidity to support “continued marketability of FHA and VA 
loans with fixed interest rates[,] . . . to counterbalance . . . the cyclical effects of general 
business recessions . . . [and to] provide[] assistance for special housing projects that were 
unable to generate sufficient private investment[.]”  Id.  Notably, Fannie Mae played no 
role in purchasing and securitizing conventional mortgage loans for sale on the secondary 
mortgage market.  
 
In 1968, thirty years after Congress created Fannie Mae, it divided Fannie Mae into 
the Government National Mortgage Association (“Ginnie Mae”) and a second entity that 
was still named Fannie Mae but became a federally chartered corporation held by private 
shareholders.  Id. (citing Federal Home Loan Mortgage Corporation, Pub. No. 67, The 
Secondary Market in Residential Mortgages 10–12 (J. Pheabus ed. 1983)).  The separate 
 
10 Congress approved, and the VA provided, a similar loan insurance program to the FHA’s 
program beginning in 1944.  Malloy, The Secondary Mortgage Market—A Catalyst for 
Change in Real Estate Transactions, supra at 992.     
22 
 
entities had fundamentally different objectives; Ginnie Mae was established under the 
Department of Housing and Urban Development (“HUD”) and was responsible for special 
assistance and housing support programs while Fannie Mae’s primary focus was to buy 
FHA and VA loans to increase the liquidity of local loan originators.  Id. at 993–94.   
As different regions in the United States began to experience rapid growth, however, 
and the development of real estate increased, local banks and savings institutions in these 
regions lacked sufficient funds to keep up with the increased demand for mortgage loans.  
Id. at 994.  In response, Congress created the Federal Home Loan Mortgage Corporation 
(“Freddie Mac”) in 1970 by enacting the Emergency Home Finance Act, 12 U.S.C. §§ 
1451–1459.  Id.  Freddie Mac’s purpose, in contrast to its predecessor agencies and for the 
first time in the secondary mortgage industry, was to purchase conventional mortgages 
from local banks and savings institutions.  See id. n.19 (“[Freddie Mac] is owned by the 
twelve member Federal Home Loan Banks, which act as the central banks for the nation’s 
thrift industry consisting primarily of savings and loan institutions.”).   
Fannie Mae was also authorized by Congress to purchase conventional loans 
beginning in 1970, in addition to its previous portfolio of FHA and VA loans.  See Fannie 
Mae, 
Fannie 
Mae 
Charter, 
https://www.fanniemae.com/about-us/corporate-
governance/fannie-mae-charter [https://perma.cc/LQ8L-2RXF].  With Fannie Mae’s 
newfound ability to purchase conventional mortgage loans, that agency and Freddie Mac 
“develop[ed] uniform standards to facilitate the purchase and sale of mortgages in the 
secondary mortgage market and thereby attract new sources of investment capital to the 
housing market.”  Malloy, The Secondary Mortgage Market—A Catalyst for Change in 
23 
 
Real Estate Transactions, supra at 994 (citing Raymond A. Jensen, Mortgage 
Standardization: History of Interaction of Economics, Consumerism and Governmental 
Pressure, 7 Real Prop. Prob. & Tr. J. 397, 397–435 (1972)). 
  Significantly, however, the creation of this newfound secondary mortgage market 
for conventional loans was “a new beginning” in the early 1970s.  See Jansen, supra at 399.  
By 1972, there was still a significant “emphasis on local practice in the real estate field.”  
Id. at 398.  It wasn’t until September 21, 1977, that Bank of America transacted “[t]he first 
private-label mortgage-securitization deal,” which was worth $100 million.11  William W. 
Bratton & Adam J. Levitin, A Transactional Genealogy of Scandal: From Michael Milken 
to Enron to Goldman Sachs, 86 S. Cal. L. Rev. 783, 799 n.44 (2013).  With the benefit of 
hindsight, Alan J. Blocher, former Vice President of Mortgage Programs and Services at 
Freddie Mac, noted in 1981 that “[a]s recently as a few years ago, these subjects would 
have been of interest only to real estate professionals and a handful of legal scholars.”  
Blocher, supra at 49.  Blocher continued by recognizing that the maturation of the 
secondary mortgage market had only “assumed greater importance” in the 1980s “because 
of the state of the home mortgage business” at that time.  Id.  By the mid-1980s, the rapid 
development of the secondary market seemed “likely to be regarded as one of the most 
important developments in real property and finance law” during that decade.  Malloy, The 
 
11 Bratton and Levitin explain that a “private-label mortgage securitization” involves the 
purchase of securitized mortgages by an entity other than Fannie Mae, Freddie Mac, or 
Ginnie Mae.  Bratton & Levitin, supra at 799 n.44. 
   
24 
 
Secondary Mortgage Market—A Catalyst for Change in Real Estate Transactions, supra 
at 991. 
   Mindful of this history, we glean from the various academic sources cited the 
following observations.  The General Assembly likely considered the existence of the 
secondary mortgage market in 1975 and, as the Majority correctly states, understood that 
certain loans were subject to assignment.  Such an observation is reinforced by the fact that 
the General Assembly included the word “assignee” in its 1975 enactment of Md. Code 
(1975, 2013 Repl. Vol.), Com. Law (“CL”) § 12-112 and its understanding that mortgages 
could be subject to “subsequent assignment.”12  Even so, the legislative history of § 12-
101(f) and the history of the secondary mortgage industry reveals that the language used 
by the General Assembly comports with its experience with and knowledge of the 
mortgage industry at the time that it enacted House Bill 26.   
The drafters of § 12-101(f) were not clairvoyant.  The General Assembly’s 
understanding of how the mortgage industry operated—i.e. who held the majority of 
mortgages on real property—was that of a legislative body sitting in 1975.  This was only 
five years after Fannie Mae began adding conventional loans to its portfolio and two years 
before the first private purchase of securitized mortgage notes occurred.  Thus, the 
threshold question here is whether the General Assembly considered that most subsequent 
mortgage notes would go on to be bought and sold on the secondary market by entities who 
 
12 This alone signals that the General Assembly did not intend to include assignees of a 
mortgage originator within the definition of “lender” in § 12-101(f) and would have 
included such language if it did.   
25 
 
do not make loans.  The answer to this question is “no.”  The unambiguous text enacted by 
the General Assembly aligns with its understanding of the mortgage industry in 1975, and 
was not based on clairvoyance, i.e., knowledge of the significant impact that mortgage 
securitization would later have on the usury statutes’ operation.   
The Majority sees fit to attach today’s understanding of the secondary mortgage 
industry to the text of House Bill 26 as a justification to consider the unambiguous plain 
text of the usury statutes as “illogical.”  In light of the history of the secondary mortgage 
industry and its status in 1975, however, this Court should not stray from the unambiguous 
text enacted by the General Assembly at that time.  The General Assembly did not intend 
for secondary mortgage industry actors to be subject to the prohibition on inspection fees 
set out in § 12-121.  This Court should recognize that the words of the statute should be 
read according to their ordinary plain meaning and that the plain language of the statute 
reflects the intent of the General Assembly, which is confirmed by the statute’s legislative 
history and the history of the mortgage industry.    
C. 
The Court of Special Appeals Misapplies this Court’s Caselaw and Misinterprets 
the History of Section 12-121.  
 
The Court of Special Appeals relies too heavily on this Court’s decisions in Taylor 
and Thompkins and improperly expands those cases to reinforce its incorrect interpretation 
of the usury statutes.  In holding that § 12-121 applies to assignees of a mortgage originator, 
the Court of Special Appeals felt “constrained by Taylor’s conclusion that, based on the 
General Assembly’s removal of the phrase ‘as a condition of the loan’ from CL § 12-121, 
the legislature intended the prohibition against property inspection fees to extend 
26 
 
throughout the life of the loan, regardless of whether it was assigned.”  Kemp, 248 Md. 
App. at 25 n.11.  Moreover, the Court of Special Appeals found that this Court’s application 
of the Secondary Mortgage Loan Law (“SMLL”) to assignees in Thompkins supports Ms. 
Kemp’s argument that § 12-121 also applies to assignees of a mortgage originator.  Neither 
case relied on by the Court of Special Appeals addresses the issue that is before the Court 
in this case nor do the cases override the General Assembly’s plainly stated intent.  
1. 
Taylor v. Friedman. 
In Taylor, this Court considered “the construction of § 12-121” in determining 
whether the statutory prohibition on inspection fees applies to only those “assessed as part 
of closing costs,” or whether the prohibition lasts “throughout the life of the loan.”  344 
Md. at 577, 581–82.  The plaintiff in that case, Larry G. Taylor, defaulted on a residential 
mortgage that was held by Margaretten & Company, Inc. (“Margaretten”).  Id. at 574–75.  
During the life of Mr. Taylor’s loan, Margaretten was acquired by Bank of America, F.S.B., 
which was renamed “BA Mortgage, a division of Bank of America, F.S.B.” (“BA 
Mortgage”).13  Id. at 575.  From time to time, Mr. Taylor was delinquent in paying his 
mortgage payment and, whenever his account was more than forty-five days delinquent, 
BA Mortgage initiated an inspection of Mr. Taylor’s property.  Id.  BA Mortgage charged 
$10 to Mr. Taylor’s account after each inspection.  Id.  
 
13 The Court in Taylor referenced Margaretten, BA Mortgage, and the substitute trustees 
named as defendants in that case collectively as “Lender.”  Taylor, 344 Md. at 575 (“We 
shall refer to the entity that held the note at any given time as ‘Lender.’”).  The Court did 
not, at any point, consider the fact that the entity holding Mr. Taylor’s mortgage was an 
assignee of the originator of the loan.    
27 
 
In 1993, Mr. Taylor wrote to BA Mortgage claiming that the inspection fees applied 
to his account were illegal under § 12-121 and seeking a refund for all previous inspection 
fees levied against him.  Id.  Mr. Taylor ceased making payments on the loan when BA 
Mortgage failed to respond or failed to meet Mr. Taylor’s demands.  Id.  BA Mortgage 
caused five inspections to be conducted on Mr. Taylor’s property, charged Mr. Taylor $50 
in inspection fees, and ultimately initiated foreclosure proceedings in the Circuit Court for 
Anne Arundel County.  Id. at 575–76.   
Before this Court, Mr. Taylor argued that the plain language of § 12-121 
unambiguously prohibited the inspection fees that were levied on his account and that such 
a prohibition survived for the duration of the loan.  Id. at 581.  In contrast, the respondents 
in Taylor maintained that the statutory language qualifying that only inspection fees 
imposed “in connection with a loan” are prohibited was ambiguous and required this Court 
to consider the statute’s legislative history.  Id. at 581–82.  Because § 12-121 was suggested 
by the Report of the Task Force on Real Property Closing Costs created by Governor Harry 
R. Hughes, the respondents argued that the General Assembly only intended to prohibit 
inspection fees in connection with real property closing costs, and the inspection fees levied 
in connection with Mr. Taylor’s default were not prohibited.  Id. at 582.     
This Court agreed with Mr. Taylor and grounded our holding in the plain language 
of the statute.  In determining that § 12-121 applies throughout the life of a mortgage, we 
analyzed the statute’s plain language and determined that inspection fees were only proper 
under the two exceptions set out in subsection 12-121(c).  See id. at 583–84.  We 
acknowledged that “[t]here is no question but that the background for the creation of the 
28 
 
Commission was a concern over real property closing costs.”  Id. at 582.  However, because 
the statute only permits property inspections “to ascertain completion of . . . (1) 
[c]onstruction of a new home; or (2) [r]epairs, alterations, or other work required by the 
lender[,]” and not as a result of a lender’s default, we determined that relevant legislative 
history did not override the statute’s plain language.  Id. at 574, 583–84. 
The Court of Special Appeals read Taylor as supporting its use of legislative history 
to override the plain language definition of “lender” in § 12-101(f), but Taylor was a 
straightforward case of statutory interpretation in which this Court unsurprisingly grounded 
its holding in the unambiguous text.  Id. at 584 (“[W]e conclude that the legislative history 
does not so clearly demonstrate a purpose to limit the prohibition of § 12-121 to closing 
costs as to override the plain language of the statute.”).  Taylor does not endorse the use of 
legislative history to override the plain language of § 12-121, as the Court of Special 
Appeals did in this case.  In fact, our holding in Taylor endorses the opposite approach.  
Although the legislative history in Taylor evidenced a concern by the General Assembly 
about closing costs, we determined that the legislative history was not so conclusive as to 
warrant a departure from the text of the statute.  In contrast, the legislative history here 
supports the unambiguous plain language of the statute and compels the Court, as it did in 
Taylor, to apply the text as it was enacted.   
The Court of Special Appeals also determined that, because the Taylor Court 
applied § 12-121 to an assignee, affirming the circuit court’s dismissal of Ms. Kemp’s 
claims would “contradict the Court of Appeals’ application of [§ 12-121] to an assignee in 
Taylor.”  Kemp, 248 Md. App. at 28.  However, nothing in Taylor is contradictory to the 
29 
 
circuit court’s plain language interpretation of the usury statutes.  Nowhere in Taylor did 
the Court address the applicability of § 12-121 to assignees of a mortgage originator or 
state that assignees are subject to the prohibition on assessing inspection fees.  While the 
Court in Taylor happened to apply § 12-121 to an assignee in that case, it gave no 
consideration to the applicability of the prohibition on inspection fees to assignees and did 
not analyze the scope of the word “lender” in § 12-101(f).   
Just last year, Judge Paula Xinis of the United States District Court for the District 
of Maryland cogently noted that “even a cursory reading of Taylor reveals that the Court 
of Appeals never addressed whether a ‘lender’ includes mortgage assignees.”  See 
Flournoy, 2020 WL 1285504, at *6 (“[T]he Court merely assumed without deciding that 
the mortgage holder was a ‘lender.’  Taylor simply does not reach whether a secondary 
mortgage holder is a ‘lender,’ and again the Court is not alone in concluding as much.”).14  
Put plainly, the Taylor Court did not address the applicability of § 12-121 to assignees 
because that issue was not before the Court and its holding does not compel this Court to 
depart from the text of the usury statutes.  
 
2. 
Thompkins v. Mountaineer Investments, LLC. 
 
The Court of Special Appeals also improperly grounded its interpretation of the 
usury statutes on this Court’s holding in Thompkins, which involved a statute not at issue 
 
14 See also Roos, 2019 WL 4750418, at *5 (quoting the court’s holding in Suazo that 
“Taylor does not stand for the proposition that assignees may be held liable under 12-
101(f).”); Robinson, 2019 WL 4735431, at *9 (“Taylor does not stand for the proposition 
that assignees may be held liable under § 12-101(f).”); Suazo, 2019 WL 4673450, at *10 
(“Taylor does not stand for the proposition that assignees may be held liable under § 12-
101(f).”) 
30 
 
here.  439 Md. 118 (2014).  In Thompkins, Marshall and Antoinette Thompkins obtained a 
secondary mortgage loan on their residence.  Id. at 123.  That mortgage was subsequently 
assigned to another entity before finally being assigned to Mountaineer Investments, LLC 
(“Mountaineer”).  Id.  Three years after paying off the secondary loan, Mr. and Ms. 
Thompkins brought suit against Mountaineer claiming that under the Uniform Commercial 
Code (“UCC”), the SMLL, and the common law, it was responsible for violations 
perpetrated by the original lender at the time of the loan transaction.  Id.  This Court was 
therefore tasked with determining whether “an assignee of a secondary mortgage loan is 
responsible for certain statutory violations allegedly committed by the original lender when 
the loan was made.”  Id. at 122.  
 
In analyzing the text of the SMLL, this Court recognized that, much like the usury 
statutes in this case, the “SMLL itself does not provide that an assignee of a lender is liable 
for the lender’s violations of that statute at the time the loan was made.”  Id. at 131.  The 
text of the SMLL was bereft of any reference to assignees of a loan originator and the Court 
contrasted the SMLL to other statutes in the Commercial Law Article where the General 
Assembly saw fit to include assignees within the plain language.  Id. at 131–32 (citing CL 
§§ 12-109.2(a)(3), 12-1001(g)(2)(iii) & 12-901(f)(2)(iii)).   
Although “the SMLL does not include a specific reference to assignments or 
assignees[,]” we also considered whether the structure of the statute suggested that the 
General Assembly intended to subject assignees to liability under the SMLL for violations 
committed by the loan originator.  Id.  In doing so, we stated in passing that “the statute is 
not entirely bereft of the notion that a loan may be assigned[]” and found it “unlikely that 
31 
 
the General Assembly intended that key ongoing protections of the SMLL . . . could be 
defeated by simply by assigning the promissory note.”  Id. at 132.  In making these 
observations, however, we ultimately relied on the plain language of the statute in holding 
that the SMLL “itself does not make an assignee directly liable for violations of the statute 
by the lender in the original loan transaction.”  Id. at 131.  Thus, this Court’s approach to 
construing the statute sought to avoid an interpretation “[that] would render the carefully 
drawn provisions” of the statute meaningless.  Id. at 138 (internal quotation marks omitted). 
Thompkins, like Taylor, confirms that this Court should apply the plain language of 
the usury statutes in this case.  As explained, Thompkins does not stand for the proposition 
that assignees are subject to the prohibition on inspection fees in § 12-121.  In Thompkins, 
this Court did not analyze the applicability of the relevant statutes in this case to assignees 
and, although it was skeptical that the General Assembly intended for assignees to be able 
to avoid the SMLL’s provisions, it made no such pronouncement about §§ 12-101 and 12-
121 of the Commercial Law Article.  We did not do so for two reasons.  First, the issue in 
this case was not before the Court.  Second, as the Petitioners correctly note in their opening 
brief, the interest and usury statutes here are distinguishable from the SMLL.  See Pet’r’s 
Br. at 36.  For example, the holders in due course provision in CL § 12-112 permits a cause 
of action against assignees who did not receive the assignment “for a bona fide and legal 
consideration” or had “notice of any usury” when the loan was created or assigned.  CL § 
12-112(b).  In Thompkins, we recognized this difference and used the holder in due course 
provision as an example as to why the SMLL did not apply to Mountaineer—not for the 
32 
 
proposition that the definition of “lender” in subsection 12-101(f) applies to assignees 
throughout Subtitle 1 of Title 12.  
As in Taylor and Thompkins, this Court should interpret the text of the usury statutes 
based on the General Assembly’s plainly stated intent.  Neither case compels the Majority’s 
application of the usury statutes to assignees of a mortgage originator because they do not 
address the issue at hand, and in both cases, the Court found that the text of the statute 
governed its interpretation.  This is particularly the case where the legislative history relied 
on by the Court of Special Appeals does not unquestionably confirm its atextual reading 
of the statutes, and the outcome reached by the circuit court does not lead to illogical 
results.  The bottom line here is that Ms. Kemp did not plead that Nationstar or Fannie Mae 
make loans.  Neither Nationstar nor Fannie Mae “made” Ms. Kemp’s loan, therefore they 
are not lenders under subsection 12-101(f) and are not subject to the prohibition on 
inspection fees laid out in § 12-121.  Because the plain language of the usury statutes is 
clear and unambiguous, and the relevant legislative history supports the circuit court’s plain 
language interpretation, this Court should affirm the circuit court’s dismissal of Ms. 
Kemp’s inspection fee claim for failing to plead facts upon which relief could be granted.   
D. 
The Circuit Court Correctly Dismissed Ms. Kemp’s MCDCA Claim. 
Although the Court of Special Appeals departed from the circuit court’s reasoning, 
it correctly affirmed the circuit court’s dismissal of Ms. Kemp’s MCDCA claim.  Under 
our inspection fee analysis above, Ms. Kemp’s MCDCA claim fails because, according to 
the plain language of §§ 12-121 and 12-101, Nationstar and Fannie Mae had the right to 
collect inspection fees as assignees of Ms. Kemp’s mortgage originator.  However, even in 
33 
 
light of the Majority’s interpretation of the usury statutes, we agree with the Court of 
Special Appeals’ analysis for two reasons.  First, as the Court of Special Appeals aptly 
determined, the MCDCA cannot be used as a sword to challenge the validity of an 
underlying debt; it regulates only the methods that the debt collector uses to collect a debt.  
Second—even if this Court determines that the MCDCA regulates more than just methods 
of debt collection—the “knowledge” requirement of § 14-202(8) precludes Ms. Kemp from 
recovering here.  
1. 
A Plaintiff May Only Challenge Prohibited Methods of Debt Collection 
Under the MCDCA, Not the Validity of an Underlying Debt. 
  
Ms. Kemp contends that Nationstar’s act of adding property inspection fees to her 
modified loan amount violates § 14-202(8) as a “claim, attempt, or threat[] to enforce a 
right with knowledge that the right does not exist.”  CL § 14-202(8).  But the text and 
structure of § 14-202 make clear that the General Assembly intended only to prohibit 
certain methods of collection, not provide a cause of action to challenge the validity of an 
underlying debt.  As such, the Court of Special Appeals correctly determined that “Ms. 
Kemp identifies no improper method of collection nor any basis on which to conclude that 
[Nationstar’s] capitalization of the property inspection fees into the modified loan was 
improper.”  Kemp, 248 Md. App. at 37.   
In agreeing with Court of Special Appeals’ analysis I would ground my 
interpretation of § 14-202 in the plain language of the statute.  Section 14-202 of the 
MCDCA outlines eleven prohibited acts that a debt collector may not take in the course of 
collecting an alleged debt and reads:   
34 
 
In collecting or attempting to collect an alleged debt a collector may not: 
(1) Use or threaten force or violence; 
(2) Threaten criminal prosecution, unless the transaction involved the 
violation of a criminal statute; 
(3) Disclose or threaten to disclose information which affects the debtor’s 
reputation for credit worthiness with knowledge that the information is false; 
(4) Except as permitted by statute, contact a person’s employer with respect 
to a delinquent indebtedness before obtaining final judgment against the 
debtor; 
(5) Except as permitted by statute, disclose or threaten to disclose to a person 
other than the debtor or his spouse or, if the debtor is a minor, his parent, 
information which affects the debtor’s reputation, whether or not for credit 
worthiness, with knowledge that the other person does not have a legitimate 
business need for the information; 
(6) Communicate with the debtor or a person related to him with the 
frequency, at the unusual hours, or in any other manner as reasonably can be 
expected to abuse or harass the debtor; 
(7) Use obscene or grossly abusive language in communicating with the 
debtor or a person related to him; 
(8) Claim, attempt, or threaten to enforce a right with knowledge that 
the right does not exist; 
(9) Use a communication which simulates legal or judicial process or gives 
the appearance of being authorized, issued, or approved by a government, 
governmental agency, or lawyer when it is not; 
(10) Engage in unlicensed debt collection activity in violation of the 
Maryland Collection Agency Licensing Act; or 
(11) Engage in any conduct that violates §§ 804 through 812 of the federal 
Fair Debt Collection Practices Act. 
 
CL § 14-202 (emphasis added). 
 
It is immediately noticeable that the plain language of the statute provides no 
support for Ms. Kemp’s preferred interpretation.  The introductory phrasing of the statute 
sets forth the eleven prohibited acts under the requirement that they be made “[i]n 
collecting or attempting to collect an alleged debt[.]”  CL § 14-202.  The General 
Assembly’s use of this language indicates that it intended to regulate affirmative actions—
i.e., methods—taken by collectors to enforce a debt.  And while Ms. Kemp contends that 
35 
 
such an interpretation runs contrary to the remedial nature of the MCDCA, this would not 
be the first instance in which the text of § 14-202 was construed as solely regulating eleven 
prohibited debt collection methods—all of which are affirmative debt collection practices.  
See, e.g., Robinson v. Kekec, 2018 WL 3387786, at *5 n.8 (Md. Ct. Spec. App. July 11, 
2018) (“[T]he purpose of the MCDCA is not to protect consumers against debts or legal 
disagreements—it protects consumers from unfair debt collection practices.” (emphasis 
added)).   
In addition to the text, the structure of § 14-202 makes it clear that the General 
Assembly intended to differentiate between the “underlying ‘debt’ that the debt collector 
is attempting to collect and the methods used to collect that debt.”  Kemp, 248 Md. App. at 
35 (emphasis in original); accord Chavis v. Blibaum Assocs., P.A., 246 Md. App. 517, 528, 
530 (2020) (“[Section] 14-202[] is meant to proscribe certain methods of debt collection 
and is not a mechanism for attacking the validity of the debt itself[.]”) (emphasis in 
original); see also Fontell v. Hassett, 870 F. Supp. 2d 395, 405 (D. Md. 2012) (“[T]he 
[MCDCA] focuses on the conduct of the debt collector in attempting to collect on the debt, 
whether or not the debt itself is valid[.]”).  The statute’s eleven prohibited acts all relate to 
debt collection activities and include verbs that comport with the Court of Special Appeals’ 
understanding of the statute, i.e., “Use,” “Threaten,” “Disclose,” “Claim,” “Attempt,” and 
“Engage.”  The General Assembly’s word choice here was deliberate; it confirms that the 
legislature enacted § 14-202 to prohibit various affirmative actions taken in connection 
with the collection of an alleged debt.      
36 
 
Two Court of Special Appeals cases help us to parse why Ms. Kemp’s arguments 
fail to afford her relief under § 14-202.  The Court of Special Appeals looked to its 
decisions in Allstate Lien & Recovery Corporation v. Stansbury and Mills v. Galyn Manor 
Homeowner’s Association in rejecting Ms. Kemp’s interpretation of § 14-202(8).  219 Md. 
App. 575 (2014); 239 Md. App. 663 (2018).  In both cases, the court determined that the 
parties subject to the alleged debt could bring a claim under § 14-202(8) because they (1) 
pleaded facts that challenged an improper method used by a debt collector; and (2) the well 
plead facts may have entitled the plaintiffs relief under the statute.   
Specifically, in Allstate Lien, the Court of Special Appeals held that “front-loading 
processing fees and including those fees” as a part of a garageman’s lien was a prohibited 
debt collection method under § 14-202(8).  219 Md. App. at 591.  The court’s decision in 
that case rationally flowed from the fact that, under CL § 16-202(c), a garageman’s lien 
“does not encompass ‘cost of process’ fees.”  Id. at 589–90.  The plaintiff in Allstate Lien 
accordingly challenged the ability of the debtor to front-load processing fees as a part of 
the lien even though those fees—by statute—were not subject to a garageman’s lien.  The 
difference between this case and Allstate Lien is that § 12-121 does not prohibit a party 
from capitalizing inspection fees into a modified home loan.  In attempting to conjure a 
claim under § 14-202, Ms. Kemp pleads facts that go directly to the validity of the 
inspection fees assessed against her.  She provides no support as to why the capitalization 
of those fees into her modified home loan balance is a method of debt collection that is 
prohibited under § 14-202(8).     
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A similar situation occurred in Mills, where the Court of Special Appeals 
determined that a plaintiff was entitled to proceed under § 14-202(8).  239 Md. App. at 
679.  In that case, a homeowners’ association (“HOA”) attempted to collect past-due HOA 
fees by filing for a lien against the delinquent resident.  Significantly, however, the HOA 
filed the lien after the statute of limitations for filing a lien had run.  Id.  The court 
accordingly determined that, under § 14-202(8), the plaintiff’s claims regarding the HOA’s 
attempt to file a lien after the statute of limitations had run challenged an improper method 
of debt collection, not the validity of the loan.  Just as it did in Allstate Lien, the Court of 
Special Appeals in Mills found that the plaintiff pleaded facts that challenged an improper 
debt collection method and entitled the plaintiff to move past the summary judgment stage 
under § 14-202(8).  Id. 
While making the distinction between methods of debt collection and the underlying 
debt itself may be an analytically rigorous exercise, I see no reason to read a cause of action 
into the statute that does not currently exist.  The Court of Special Appeals—on numerous 
occasions—has interpreted § 14-202 by its plain, unambiguous text.  The United States 
District Court for the District of Maryland agreed with such an interpretation and found 
that “Section . . . 14-202(8) only makes grammatical sense if the underlying debt, expressly 
defined to include an alleged debt, is assumed to exist, and the specific prohibitions are 
interpreted as proscribing certain methods of debt collection rather than the debt itself.”  
Fontell, 870 F. Supp. 2d at 405 (emphasis in original).  And although the authority cited 
above is not binding on this Court, it serves as a strong indicator that the text enacted by 
the General Assembly unambiguously demonstrates its plainly stated intent.  Therefore, 
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this Court should apply the text of § 14-202 as it is written and decline to read a cause of 
action into the statute that does not exist.     
2. 
The Petitioners Did Not Have “Knowledge” that the “Right” to Assess 
Inspection Fees Does Not Exist For Assignees of a Mortgage Originator. 
  
Even under the Majority’s view that the MCDCA provides a cause of action for a 
plaintiff to challenge the validity of an underlying debt, the circuit court’s dismissal of Ms. 
Kemp’s MCDCA claim is still the proper outcome.  The statute’s prohibition on 
[c]laim[ing], attempt[ing], or threaten[ing] to enforce a right . . . that . . . does not exist” 
requires that the perpetrator do so “with knowledge.”  CL § 14-202(8) (emphasis added).  
Therefore, for Ms. Kemp’s claim to survive at the motion to dismiss stage, she had to plead 
some facts demonstrating that the Petitioners knew that the inspection fees assessed under 
§ 12-121 were unlawful.  I am unconvinced that the Petitioners had the requisite 
“knowledge” to be held liable under § 14-202 because: (1) the text of § 12-121 suggests 
that it only applies to loan originators; (2) every court that has considered this issue, besides 
the Court of Special Appeals in this case, has held that § 12-121 does not apply to assignees 
of a mortgage originator; and (3) no authority supports Ms. Kemp’s contention that 
capitalizing inspection fees is a “right” that does not exist.    
Although the Majority disagrees, and as explained more fully supra, the text of §§ 
12-101 and 12-121 demonstrates that it does not apply to assignees of a mortgage 
originator.  The plain language of the usury statutes makes no reference whatsoever to 
assignees; therefore, the statutes did not put Petitioners on notice that they may be 
prohibited from assessing inspection fees under §12-121.  Although the Petitioners cannot 
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“escape liability . . . merely because they didn’t bother to make themselves aware” of the 
statutes’ applicability to assignees of a mortgage originator, that is not the case here.  
Fontell, 870 F. Supp. 2d at 408.  Every court that has addressed the plain language of § 12-
121—including the circuit court in this case—has determined that the text unambiguously 
illustrates that assignees are not subject to the statute in its current form.  The Majority’s 
determination that the Petitioners knew that they were subject to § 12-121 renders the 
“knowledge” requirement in § 14-202(8) toothless and ignores the requirement that “[t]he 
well-pleaded facts setting forth the cause of action be pleaded with sufficient specificity[.]”  
RRC Northeast, LLC. v. BAA Md., Inc., 413 Md. 638, 644 (2010) (citing Adamson v. Corr. 
Med. Servs., Inc., 359 Md. 238, 246 (2000)) (“Bald assertions and conclusory statements 
by the pleader will not suffice.”).  The facts pleaded in Ms. Kemp’s amended complaint 
provide conclusory allegations that fail to demonstrate that the Petitioners acted with the 
requisite knowledge and do not entitle her MCDCA claim to survive Petitioners’ motion 
to dismiss.         
The Majority’s determination that Ms. Kemp pleaded facts sufficient to challenge 
an improper debt collection method insinuates that she also pleaded facts sufficient to 
demonstrate that Petitioners knew capitalizing the inspection fees into Ms. Kemp’s loan 
was a “right” that did not exist.  Ms. Kemp pleads no such facts. Because the assessment 
of a property inspection fee by an assignee does not violate CL §12-121, Ms. Kemp’s 
complaint did not properly allege that capitalizing the inspection fees into her loan was a 
“right” that did not exist, and the complaint failed to allege that Petitioners had 
“knowledge” that the “right” did not exist.  For these reasons, this Court should affirm the 
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judgment of the Court of Special Appeals and hold that the circuit court properly dismissed 
Ms. Kemp’s MCDCA claim.