Opinion ID: 787570
Heading Depth: 2
Heading Rank: 1

Heading: Claims Against Union and AMP

Text: 6 The complaints 1 allege causes of action for (1) statutory usury; (2) violations of Washington's Consumer Protection Act (CPA); 2 (3) negligence; and (4) common law usury. Borrowers contend that their loans were usurious because Union and AMP were not licensed by the state of Washington to charge interest in excess of 12%. They further allege that, as assignees of the loans, TMS and the Trust Defendants are subject to all claims and defenses that Borrowers may assert against Union and AMP. 7 Defendants contend that, as loan brokers, Union and AMP did not need licenses under the CLA because they were not lending their own money. They contend that in each of the loans at issue, Union and AMP acted only as brokers because each loan was table-funded by Empire, TMS, or FirstPlus, each of whom was licensed under the CLA to charge interest rates up to 25%. 8 Table-funding is defined as a settlement at which a loan is funded by a contemporaneous advance of loan funds and an assignment of the loan to the person advancing the funds. See, e.g., 24 C.F.R. § 3500.2. 3 In a table-funded loan, the originator closes the loan in its own name, but is acting as an intermediary for the true lender, which assumes the financial risk of the transaction. The timing of the assignment is therefore sometimes pivotal in determining whether a residential mortgage loan is table-funded because the determinative question is who bears the risk of the transaction. 9 On August 7, 2002, the district court granted defendant-appellee TMS's motion for summary judgment in Zacher. In its order, the court conclude[d] that plaintiffs have not established a prima facie case of usury or negligence under Washington state law. 10 Reviewing Washington statutes and case law, the court held that a loan broker may close a loan in its own name at an interest rate greater than 12%, so long as the loan is table-funded and the party that provides the money for the loan is licensed under the CLA. The court found that there was no genuine issue of material fact as to whether the loans in the Zacher case were table-funded and granted summary judgment on all claims. 11 On August 29, 2002, the district court entered an order granting summary judgment in favor of AMP against all plaintiffs except Paula Scott in Stone. The district court held that — with the exception of Scott's loan — there was no genuine issue of material fact as to whether any of Borrowers' loans had been table-funded. The district court denied AMP's motion for summary judgment on Scott's claims, finding an issue of fact as to whether her loan was table-funded. 4