Chevy Chase Bank v. Chaires

RODOWSKY, Judge. The issue of public importance in this case lies at the intersection of two statutes, the Secondary Mortgage Loan-Credit Provisions Law (SMLL), Maryland Code (1975, 1990 Repl.Vol.), §§ 12-401 through 12-415 of the Commercial Law Article (CL), and the Shore Erosion Control Law (SECL), Maryland Code (1974, 1990 Repl.Vol., 1997 Cum.Supp.), §§ 8-1001 through 8-1008 of the Natural Resources Article (NR). The appellees contend, and the Circuit Court for Prince George’s County concluded, that the appellant’s refinancing of a mortgage on appellees’ waterfront residential property, that was subject to a prior lien of the State under SECL, constituted a second mortgage under SMLL. We agree with the conclusion of the circuit court on that issue.

We agree, however, with the appellant’s contention that, under the unique facts of this case, appellees are estopped from claiming under SMLL. In 1980, William M. Chaires, one of the appellees, purchased a piece of unimproved waterfront land located at 5 Loudon Lane in Annapolis, Maryland for $90,000 (the Loudon Lane property). The property was eroding into the Severn River. Thereafter, Mr. Chaires was contacted by the Maryland Department of Natural Resources (DNR) about the construction of a bulkhead which would control the erosion problem.

Pursuant to SECL, DNR loaned Mr. Chaires the cost of constructing the bulkhead, $20,690. The principal was repayable over twenty-five years at the rate of $827 per year, without interest, secured by a statutory lien on the Loudon Lane ⁷¹⁹ property (the Shore Lien). On January 12, 1981, the Shore Lien was recorded in the Land Records of Anne Arundel County. In 1985 William Chaires and the other appellee, Laurie G. Chaires, were married, and Mr. Chaires placed the title to the Loudon Lane property in the names of the two as tenants by the entireties.

In January 1988, the Chaireses made a loan from Queens-town Bank of Maryland (the Queenstown Loan) of up to $350,000, secured by a deed of trust on the Loudon Lane property. This was to be used for the construction of a residence on the property. The deed of trust securing the Queenstown Loan does not recite that it is a second mortgage, nor does the record reflect that the Chaireses ever claimed that the Queenstown Loan was subject to SMLL. Earlier the Chaireses had met with a representative of B.F. Saul Mortgage Company (B.F. Saul) to discuss a residential first mortgage loan in the amount of $350,000, and the Chaireses returned to B.F. Saul to refinance the Queenstown Loan.

That refinancing closed on June 14, 1988. With the consent of B.F. Saul, Mr. Chaires, who is a Maryland lawyer, acted as settlement attorney. The loan from B.F. Saul to the Chaireses was in the amount of $350,000, repayable over forty years, at an adjustable rate of 7.625%, and secured by a deed of trust on the Loudon Lane property (the B.F. Saul Loan). The entire principal amount of the B.F. Saul Loan was used to pay off the Queenstown Loan, then amounting to $350,000.

In order to close on the B.F. Saul Loan, the borrowers were required to produce $6,399 of their own funds in order to pay an origination fee of 1.5 points, advance interest, and other charges. Mr. Chaires testified that he never had any intention of paying off the interest-free Shore Lien as part of the closing on the B.F. Saul Loan. B.F. Saul assigned the loan to the appellant, Chevy Chase Bank, FSB (Chevy Chase), on the day the loan was made. Payments under the B.F. Saul Loan, initially in the amount of $1,895.34 per month, were due on the first of the month.

If a payment was not received by the sixteenth of the month, the ⁷²⁰ borrowers incurred a late charge of five percent. The Chaireses characterized this fifteen-day window as a “grace period,” and often failed to remit their mortgage payment until sometime after the first of each month. Chevy Chase assessed the Chaireses with periodic late charges as well as $45.00 in fees for checks returned for insufficient funds. On two occasions in the history of the loan, in December 1994 and August 1995, Chevy Chase forwarded the loan to an attorney for foreclosure.

On each occasion the borrowers cured the delinquencies before foreclosure. In May 1995, the Chaireses filed suit in the Circuit Court for Prince George’s County against Chevy Chase and B.F. Saul. After several amendments, the complaint contained eleven claims: (1) illegal lending practices under SMLL, (2) violations of the Maryland Consumer Debt Collection Act, (3) breach of contract, (4) intentional infliction of emotional distress, (5) declaratory relief, (6) civil conspiracy, (7) breach of an implied covenant of good faith and fair dealing, (8) civil RICO and mail fraud against B.F. Saul, (9) civil RICO and mail fraud against Chevy Chase, (10) unfair debt collection prohibited by federal law, and (11) fraud. The claim for declaratory judgment was based on CL § 12-413 which provides in part that “[ejxcept for a bona fide error of computation, if a lender violates any provision of [SMLL] he may collect only the principal amount of the loan and may not collect any interest, costs, or other charges with respect to the loan.” Plaintiffs sought a judgment determining the total amount of all payments to Chevy Chase and declaring that those payments reduced the principal amount of the loan.

The Chaireses’ theory of the case was that the Shore Lien was a first lien on the Loudon Lane property, making the B.F. Saul Loan a second mortgage regulated by SMLL. The borrowers claimed SMLL violations based on Chevy Chase’s requirement for property insurance in excess of the replacement cost of the improvements, imposition of late fees, requests that certain payments be made by certified check, failure to allow a statutory ten-day grace period, use of an adjustable interest rate, and the imposition of certain interest ⁷²¹ charges, fees for dishonored checks, property inspection fees, and other charges. Asserting that the lenders had violated SMLL as a matter of law, the Chaireses sought a partial summary judgment finding the lenders liable on the SMLL count of the complaint. The lenders’ defense to this motion for partial summary judgment was that the loan was not a second mortgage lien for purposes of SMLL; rather, the Shore Lien was a benefit assessment that was current and was to be treated similarly to future taxes.

The circuit court entered partial summary judgment in favor of the Chaireses, ruling that the Shore Lien was a lien of prior encumbrance under SMLL. Summary judgment was granted in favor of B.F. Saul on all counts and in favor of Chevy Chase as to Counts Four, Eight, Nine, Ten, and Eleven. 1 The court reserved as a factual question whether Chevy Chase engaged in conduct that violated SMLL. The case was tried to a jury on the plaintiffs’ claims against Chevy Chase for damages for illegal lending practices under SMLL, violations of the Maryland Consumer Debt Collection Act, breach of contract, and breach of an implied covenant of good faith and fair dealing, as well as on issues relating to declaratory relief. The verdict consisted of answers to special interrogatories.

The jury found that Chevy Chase had violated SMLL as to each of the plaintiffs by charging one or more impermissible fees, by including in the loan contract an impermissible acceleration clause, by requiring unequal installment payments produced by utilizing an adjustable rate of interest, and by requiring property insurance coverage in excess of the replacement cost of the residence. The jury further found that the principal amount of the loan was $350,000 and that the amount paid by the Chaireses was $277,000. These findings related to that part of CL § 12-413, ⁷²² quoted above, that limits to principal the amount collectible by a lender who violated SMLL. Additionally, the jury found that Chevy Chase “knowingly” violated SMLL.

This finding related to another part of CL § 12-413 which provides that “a lender who knowingly violates any provision of [SMLL] also shall forfeit to the borrower three times the amount of interest and charges collected in excess of that authorized by law.” The jury found that the treble interest amount was $3,704 as to each plaintiff. CL § 13—301(14)(iii) makes it an unfair or deceptive trade practice in violation of the Consumer Protection Act, CL Title 13, to violate a provision of the Maryland Consumer Debt Collection Act, CL Title 14, Subtitle 2. The jury found that Chevy Chase had violated the Consumer Protection Act in that fashion. The Consumer Protection Act authorizes “any person [to] bring an action to recover for injury or loss sustained by him as the result of a practice prohibited by [the Consumer Protection Act].” CL § 13-408(a).

The court submitted a special interrogatory to the jury that defined injury or loss to include emotional distress or mental anguish. The jury found that William Chaires had not suffered any injury but that Laurie Chaires was injured, for which damages in the amount of $5,000 were awarded. With respect to the count of the complaint alleging breach of contract, the jury found that Chevy Chase had materially breached the B.F. Saul Loan contract as to both plaintiffs, to whom the jury respectively awarded $8,619 in damages. On the count alleging breach of an implied obligation of good faith, the jury found in favor of Chevy Chase.

Thereafter, the court rendered a final judgment in favor of the plaintiffs, by entering judgments for the monetary damages and by entering a declaratory judgment implementing the findings concerning civil penalties available under SMLL, CL § 12-413. The court declared that the principal balance of the mortgage loan was $73,000 ($350,000 less $277,000) and decreed that the $73,000 would be payable in equal install ⁷²³ ments, without interest, over the remaining term of the B.F. Saul Loan. At the same time that final judgment was entered, the court also awarded $73,700 in counsel fees to the attorneys for William Chaires and $14,437.50 in counsel fees to the attorney for Laurie Chaires. 2 These counsel fees were awarded pursuant to SMLL and to the Consumer Protection Act. The section of SMLL that prohibits required property insurance in excess of replacement cost of the mortgaged residence provides for reasonable attorney’s fees.

See CL § 12-410(d)(l)(v)2. Further, the Consumer Protection Act provides that “[a]ny person who brings an action to recover for injury or loss under [CL § 13-408(a) ] and who is awarded damages may also seek, and the court may award, reasonable attorney’s fees.” CL § 13-408(b). In the instant matter that person is Laurie Chaires, the only plaintiff to whom damages were awarded for a violation of the Maryland Consumer Debt Collection Act, as incorporated into the Consumer Protection Act by CL § 13-301 (14)(iii). Chevy Chase appealed to the Court of Special Appeals.

Prior to consideration of this matter by that court, we issued the writ of certiorari on our own motion. In this Court Chevy Chase contends (1) that the Shore Lien was not a prior lien so that the B.F. Saul Loan was not a second mortgage regulated by SMLL, (2) that the plaintiffs were estopped from asserting claims based on applying SMLL to the transaction, (3) that federal regulations governing federal savings banks preempted application of SMLL to the B.F. Saul Loan, and (4) that the award of attorneys’ fees was excessive. Chevy Chase does not appeal those portions of the judgment finding that it violated the Maryland Consumer Debt Collection Act and that it breached its contract with the Chaireses. Additional facts will be set forth; as necessary, in discussing particular issues. ⁷²⁴ I In holding that SMLL applied to the transaction when granting partial summary judgment to the plaintiffs, the circuit court concluded that the B.F. Saul Loan fell within the statutory definition of a secondary mortgage because the Shore Lien was a “lien ... of prior encumbrance[ ]” under CL § 12—401(i)(l).

Section 12-401(i) reads, in part, as follows: “Secondary mortgage loan.—(1) ‘Secondary mortgage loan’ means a loan or deferred purchase price secured in whole or in part by a mortgage, deed of trust, security agreement, or other lien on real property located in the State, which property: (i) Is subject to the lien of one or more prior encumbrances, except a ground rent or other leasehold interest; and (ii) Has a dwelling on it designed principally as a residence with accommodations for not more than four families.” 3 The Shore Lien secures an interest-free loan from the State, as authorized by SECL. The loan is part of a program whose purpose is to control shore erosion. SECL creates the Shore Erosion Control Construction Loan Fund (the Fund). The Fund is maintained by repayments of principal on loans made from the Fund and by annual appropriations of general funds.

NR § 8-1005(a)(l). The owner of any property abutting any body of water in the State may apply for assistance from the Fund. NR § 8-1003. Property owners whose projects are approved are eligible to receive loans, the amount of which is governed by a sliding scale in relation to project construction costs.

NR § 8- ⁷²⁵ 1005(a)(2). Cash contributions by the property owner may be required for projects over $60,000. Id. The property owner is also required to execute a written notice to proceed, NR § 8-1005(d)(2), at which time DNR causes a notice of lien to be recorded.

NR § 8-1005(d)(4). That notice describes the lien priority provided by § 8-1006, set forth, infra. When a shore erosion control project has been satisfactorily completed, the Board of Public Works, on certification from DNR, levies a benefit charge payable in annual installments, due July 1, over a period of up to twenty-five years. The charge is calculated to return the net project construction cost to the State, without compensation to the State by way of interest for the use of the public funds.

NR § 8-1006(a) and (b). NR § 8-1006 further provides as follows: “(c) Lien; collection of installments in default.—A benefit charge assessed under this subtitle shall be a lien on the real property against which the benefit charge is assessed, and shall be subject to collection in the manner specified for foreclosure of mortgages. Any annual installments in default shall be a first lien on the benefited property, subject only to prior State, county, or municipal real property taxes. The outstanding balance of a benefit charge shall be afforded normal lien priority, except that the Department may agree in writing to grant precedence to a subsequent mortgage or deed of trust if necessary for refinancing, transfer, or improvement of a benefited property. “(d) Sale of benefited 'property.—Annual installments shall be a personal obligation of the owner of a benefited property at the time the installments become due.

Sale of a benefited property may not extinguish a lien under this subtitle, and the purchaser in all instances shall take the property subject to any outstanding balance of the total benefit charge still unpaid at the conclusion of the sale, and shall be required to meet the same annual installments as previously were being assessed. Any notice of sale clearly shall identify this potential liability, provided that failure to so notify may not affect the obligation if the notice of lien ⁷²⁶ required under § 8-1005(d)(4) of this subtitle is filed properly.” (Emphasis added). NR § 8-1007(a) addresses transfers of property subject to a shore lien with the following provision. “Recording transfer of benefited property.—For purposes of § 3-104 of the Real Property Article, which pertains to payment of taxes as a prerequisite to recording of any transfer of property, it is sufficient that all current annual installments of any benefit charge levied under this subtitle have been paid.” In entering partial summary judgment for the plaintiff, the circuit court analyzed the interrelationship between SMLL and SECL as follows: “The shore liens have normal lien priority (except for amounts in default which have first priority), they are payable over time, the property is security for the loan, they can be subordinated, and while they do not contain a power of sale, the statute provides they may be enforced in the same manner as specified for foreclosure of mortgages, implying the power of sale, all in the manner of a traditional lien on property. “More obviously, [NR §] 8-1006(c) establishes the shore lien as a lien on the real property against which the benefit is assessed, and gives it normal lien priority (except for payments in default which go first in priority after State, county, or municipal real property taxes). Nothing in [SMLL] states that the prior encumbrance must be a traditional mortgage or deed of trust in order to qualify it as a prior encumbrance subject to the provisions of the secondary mortgage statute.” The issue here is whether the Shore Lien is the type of lien that can trigger the application of the restrictions on lenders imposed by SMLL when the property owner later obtains a commercial loan secured by the property which also secures the earlier shore erosion loan. ⁷²⁷ In its argument to us, Chevy Chase analogizes the Shore Lien to real estate taxes, but that analogy is not complete.

Property taxes become due on July 1 in each taxable year. Md.Code (1986, 1994 Repl.Vol.), § 1Q-I02(a) of the Tax-Property Article (TP). “[Pjroperty tax that is due on July 1 of the tax year may be paid without interest on or before September 30 of the tax year, and is in arrears after September 30 of the tax year.” TP § 10-102(b). All unpaid real property taxes are liens on the realty from the date the taxes become “payable.” TP § 14-804(a). A first lien attaches to the real property in the amount of the property tax “[f]rom the date property tax on real property is due.” TP § 14-805(a).

Federal courts have concluded that the real property tax lien in Maryland arises on July 1 of the tax year. See Maryland Nat’l Bank v. Mayor & City Council of Baltimore, 723 F.2d 1138, 1141 (4th Cir.1983); In re Sylvia Dev. Corp., 178 B.R. 96 (Bkrtcy.D.Md.1995); In re Reamy, 169 B.R. 352 (Bkrtcy. D.Md.1994).

Chevy Chase’s analogy to real estate taxes benefits it, but only as to that aspect of the Shore Lien which gives to an unpaid current installment of the benefit assessment a priority that is senior to all but “prior State, county, or municipal real property taxes.” NR § 8-1006(c). In enacting SMLL the General Assembly could not have intended that a lien securing a commercial mortgagee, who enjoyed a first lien when the loan was made, periodically would move into and out of secondary lien status under SMLL depending on how promptly the borrower paid real estate taxes in any given year. Similarly, a shore lien that is recorded after a prior mortgage would not convert the prior lien into a secondary mortgage under SMLL solely because an annual installment of the shore lien is not timely paid, thereby causing a lien, to the extent of that unpaid installment of the shore erosion loan, to leapfrog a senior mortgage. The Chaireses’ position, however, rests not on the priority granted delinquent installments of shore lien benefit assessments, but on the “normal lien priority,” NR § 8-1007(c), that this Shore Lien enjoys by virtue of its priority in time and ⁷²⁸ recordation over the B.F. Saul Loan, and indeed, over the Queenstown Loan that the B.F. Saul Loan refinanced.

The Chaireses submit that “Chevy Chase’s argument that the Shore Lien is not an encumbrance under [SMLL] would go further than requiring an exception to [SMLL]. It would require that an exception be added to [SMLL] and that the ‘normal hen priority’ afforded shore liens ... be ignored.... ” Brief for Appellees at 15. Secondary mortgage loans were originally regulated by Chapter 390 of the Acts of 1967. 4 As originally enacted the statute included both credit and licensing provisions. In the 1975 enactment of the Commercial Law Article, as part of the Code Revision process, the two types of provisions were split, the credit provisions becoming SMLL while the licensing provisions remained a part of Article 66, Title, “Mortgages.” See Md.Code (1957, 1979 RepLVol.), Art. 66, §§ 39 through 60, §§ 68 through 70.

Only stylistic changes were made in 1975 to the definition of a secondary mortgage loan, now codified as CL § 12-401(i). See Revisor’s Note to Code (1975) CL § 12-401(j). That definition has not been substantially changed to date. When enacting SMLL in 1967 the General Assembly did not have SECL before it.

A shore erosion control program under which the State made loans to the owners of privately owned shore front properties was first authorized by Chapter 563 of the Acts of 1969, and that statute was refined and the Fund was established by Chapter 245 of the Acts of 1970. To enforce collection of loans made under the SECL program the State originally relied on the contractual rights of DNR (including its predecessor agencies) under agreements between DNR and a property owner. See Md.Code (1957, 1970 RepLVol.), Art. 66C, § 758A. Chapter 615 of the Acts of 1980 first ⁷²⁹ enacted the lien provisions presently found in NR § 8-1006(c). 5 One of the purposes of Chapter 615 was “eliminating all references to agreements between [DNR] and property owners as constituting the basis for repayment.” 1980 Md. Laws at 2150.

Under the plain meaning of SMLL § 12-401(i)(l)(i) the Shore Lien is a “lien of ... prior encumbrance! ].” In Manor Real Estate Co. v. Jos. M. Zamoiski Co., 251 Md. 120 , 246 A.2d 240 (1968), we quoted with approval the trial judge’s statement that “ ‘a lien is always an encumbrance, but an encumbrance need not necessarily be a lien.’ ” Id. at 125 , 246 A.2d at 243 . Two decisions of this Court, dealing with the effect of Washington Suburban Sanitary Commission (WSSC) benefit assessments under the language found in particular contracts for the sale of real estate, demonstrate that the Shore Lien is at least an encumbrance. Id.; Morris v. Ehlers, 211 Md. 23 , 124 A.2d 776 (1956).

In Morris , the contract provided that assessments for improvements completed prior to the date of the contract, whether the assessment was levied or not, would be paid by the sellers. Moms, 211 Md. at 25 , 124 A.2d at 777 . The sellers resisted deducting from their net sale proceeds the total of all of the annual payments of a WSSC benefit assessment to be made over the remaining life of the assessment. The sellers relied on testimony describing a custom in Montgomery County “under which only annual current instalments of front foot benefit charges made by the [WSSC] are adjusted to the date of transfer and under which no allowance is made for the unpaid portion of the original assessment.” Id. at 27 , 124 A.2d at 779 .

The Court held that, under the contract, the sellers were obliged to pay the aggregate assessments. ⁷³⁰ In Morris , this Court noted that courts in the District of Columbia had held that WSSC benefit assessments became liens only to the extent of a delinquent annual installment. See District Title Ins. Co. v. United States, 169 F.2d 308 (D.C.Cir.1948), and Union Realty Co. v. Ahem, 93 A.2d 84 (D.C.App.1952); see also Ahrens v. Broyhill, 117 A.2d 452 (D.C.App.1955). Montgomery County Code (1955) § 74-37.C specified that the benefit assessments involved in Morris “shall for all purposes of collection be treated as county taxes....” Nevertheless, this Court pointedly abstained from opining on whether the “charges constituted liens against the property for the full amount thereof from the dates when they became final under the statute, or whether they constituted liens only as and when annual charges were entered.... ” Morris, 211 Md. at 28 , 124 A.2d at 779 .

Manor Real Estate Co. involved provisions in a contract for the sale of realty, including a promise to convey clear of all liens and encumbrances. 251 Md. at 122 , 246 A.2d at 241 . The purchaser asserted that the vendor thereby was contractually liable for the aggregate of installments to be paid under a WSSC benefit assessment. The Court held that the vendor was liable because the stream of assessment installments constituted an encumbrance. Because the vendor’s promise included both liens and encumbrances, this Court once again found it unnecessary to decide whether the benefit assessments to be paid in the future constituted a lien.

Id. at 129-30 , 246 A.2d at 245 . The method for collecting unpaid benefit assessments of the type involved in Manor Real Estate Co. was the same as that for collecting real property taxes, as provided by Prince George’s County Code (1963) § 83-72(c), the language of which is identical to that appearing in the section of the Code of Public Local Laws of Montgomery County that was involved in Morris . The vendor in Manor Real Estate Co. insisted “that the benefit charge is in reality a tax.” 251 Md. at 131 , 246 A.2d at 246 . Rejecting that argument this Court said: “But there are important differences between real estate taxes and WSSC benefit charges.

Taxes are levied annual ⁷³¹ ly; the benefit charge is levied but once. Taxes change as to amount depending on changes in the tax rate and fluctuations in the assessed value of the property; the annual instalments of the benefit charge remain constant. Taxes continue indefinitely; the annual instalments of the benefit charge cease when the bonds are retired. Taxes cannot be ‘redeemed or extinguished’ by the payment of a determinable amount; the benefit charge can be so redeemed or extinguished.

Taxes, except special taxes, become a part of the county’s general fund; the benefit charge can be used only to amortize and service the bond issue. And however unlikely it may seem to us now, it is possible that new sources of revenue may, at some future time, result in the elimination of the tax on real estate; the benefit charge must continue inexorably to its predetermined expiration.” Id. See also J. Cole et al., Special Risks for Title Insurers and Lenders at 87 (MICPEL 1989). Thus, the SECL benefit assessment is clearly an encumbrance.

Further, from and after Chapter 615 of the Acts of 1980, it is also a lien. “The modern conception of a lien is that it is a right given by contract, statute or rule of law to have a debt or charge satisfied out of a particular property.” 3 Am. Law of Property § 1320, at 537 n.4 (A.J. Casner ed.1952). Here, NR § 8-1006(c) creates a statutory lien in favor of the State (“A benefit charge assessed under this subtitle shall be a lien on the real property against which the benefit charge is assessed.”), not only as to an annual installment in default (which “shall be a first lien on the benefited property, subject only to prior State, county, or municipal real property taxes”) but also as to the “outstanding balance of a benefit charge [which] shall be afforded normal lien priority.” Further the method for enforcing the lien is not tied to annual taxes. The State may enforce collection “in the manner specified for foreclosure of mortgages.” Id.

Nor is it possible in any principled fashion to carve the Shore Lien out of SMLL based on the purpose of SMLL. That purpose was to protect consumers. See Schmidt v. Beneficial Fin. Co., 285 Md. 148 , 400 A.2d 1124 (1979) (second mortgage ⁷³² loan made by lender licensed only under the Maryland Consumer Loan Law, now CL §§ 12-301 through 12-317, but whose transaction fell within the definition of a secondary mortgage under SMLL was limited to the lower rate of interest permitted under SMLL and violated the latter by charging the higher interest permitted under the Maryland Consumer Loan Law); Thoreson v. Shaffer, 111 Md.App. 689 , 683 A.2d 1153 (1996). 6 Although it may be unlikely that the General Assembly in enacting SMLL specifically contemplated first liens on residential property that were made directly by the State or local government, a judicial construction of SMLL that carved out loans made by a governmental entity, or non-interest bearing loans made by a governmental entity, could have the side effect of excluding from SMLL the very class of consumers primarily intended to be protected by that statute.

For example, under the Maryland Home Financing Program, Md.Code (1957,1995 RepLVol.), Art. 83B, §§ 2-601 through 2-614, the Department of Housing and Community Development (the Department) may make loans directly to households of limited income for the purpose of purchasing, purchasing and rehabilitating, or refinancing a primary residence. § 2-602(1). These loans are at preferred interest rates. § 2-601 (g). The Department, further, through its Community Development Administration, is authorized to purchase from mortgage lenders residential mortgage loans made to families of limited income. § 2-612. Article 83B,