Opinion ID: 1306135
Heading Depth: 1
Heading Rank: 6

Heading: Broker Fee.

Text: As mentioned, the district court concluded the $2,385 was a loan broker fee paid directly to SMC, and was not paid to or collected by Long Beach; therefore, Long Beach did not violate section 535.8(2). The Gardins concede the $2,385 fee, which they describe as a loan origination fee or a loan processing fee, was paid directly to SMC. However, they contend that Long Beach collects that fee from the Gardins because the loan itself was the source of the funds used to pay it. Therefore, the Gardins contend, Long Beach necessarily collects the fee from them over the life of the loan with interest. They argue (1) the term collect refers to all settlement charges collected by the lender from the borrower in the form of monthly payments and (2) the excessive charges, to whomever paid, ultimately redound to the benefit of the lender. To resolve this issue, we need look no further than the plain language of the statutes and the agreement between the Gardins and SMC. Reading the statutory scheme as a whole, it is plain to us that Long Beach did not collect the six-percent broker fee from the Gardins. As a preliminary matter, we think the record is not clear enough to make a determination as to whether SMC was a loan broker as defined in section 535C.2(4) or a mortgage broker as defined in section 535B.1(5). Whether it was one or the other, our ultimate conclusion is the same. Section 535.8 does not define the terms lender or collect. We therefore look to their common meaning. Lender is defined as a person or entity from which something (esp.money) is borrowed. Black's Law Dictionary 913 (7th ed.1999); see also Webster's Encyclopedic Unabridged Dictionary 1101 (1996) (defining lend as to give (money) on condition that it is returned and that interest is paid for its temporary use). Given these definitions, we conclude Long Beach was clearly the lender in this transaction. Collect is defined as to receive payment. Black's Law Dictionary 238 (5th ed.1979); see also Webster's Encyclopedic Unabridged Dictionary 403 (defining collect as to receive payment). As mentioned, the Gardins concede the six-percent fee was paid directly to SMC. Under the plain meaning of collect, Long Beach clearly did not receive the payment; SMC did. Therefore, Long Beach did not collect this fee and for that reason did not violate section 535.8(2)( a ). The Gardins' argument that Long Beach collected the fee because the loan was the source of the funds used to pay it leads to an absurd result. The Gardins admitted they understood they were paying a finders fee to SMC. Further, the Agreement gave them the choice of whether to pay the fee out of the proceeds of the loan or by a separate check at the closing. Their decision to pay the fee out of the proceeds of the loan should not dictate the outcome of this case. The lenderwhich in this case was not a party to the Agreement between the Gardins and SMCshould not be held liable for a choice the borrower made as to how the broker fee was to be paid. The district court correctly adopted a narrow definition of collect, according to the plain meaning of the statute. If the legislature intended for collect to have a broader meaning, it should have said so. See Krull v. Thermogas Co., 522 N.W.2d 607, 612 (Iowa 1994) (in searching for legislative intent, the court is bound by what the legislature said, not by what it should or might have said).