Pence v. Norwest Bank Minnesota, N.A.

²⁶⁹ CATHELL, Judge. On September 29, 1997, June L. Pence, petitioner, filed a complaint in the Circuit Court for Baltimore City against Maryland Financial Resources, Inc. (hereinafter Maryland Financial), Access Financial (hereinafter Access), Norwest Bank Minnesota (hereinafter Norwest), LSI Financial Group (hereinafter LSI Financial), First Security Savings Bank (hereinafter First Security), 1 and Michael Fine. 2 In the complaint, petitioner alleged that the defendants violated Maryland’s Secondary Mortgage Loan Law (SMLL), codified at Maryland Code (1975, 2000 Repl.Vol.), Title 12, Subtitle 4 of the Commercial Law Article. 3 On August 13, 1998, petitioner filed a Motion for Summary Judgment in the Circuit Court for Baltimore City. This motion was granted by the Circuit Court. Respondents filed a Motion to Alter or Amend Judgment, which was denied by the Circuit Court.

Respondents then filed a Notice of Appeal to the Court of Special Appeals. In an opinion filed on June 2, 2000, the Court of Special Appeals reversed the decision of the Circuit Court for Baltimore City in Norwest Bank Minnesota, N.A., Trustee v. ²⁷⁰ Pence, 132 Md.App. 363 , 752 A.2d 681 (2000). Petitioner filed a Petition for Writ of Certiorari and respondents filed a Reply and Conditional Cross-Petition. We granted both petitions. 4 Two questions were presented to this Court: 1.

Did the Court of Special Appeals err in holding that a Baltimore City Deferred Loan (for housing rehabilitation) does not subject the real property to “the lien of [a] prior encumbrance” under the Maryland Secondary Mortgage Loan Law? 2. Can a federal savings bank that purchases a loan originated by a Maryland finance company claim broad federal preemption of the Maryland Secondary Mortgage Loan Law? 5 [Alteration in original.] We answer question one in the negative and therefore affirm the decision of the Court of Special Appeals. We hold that the Court of Special Appeals properly held that the agreement between petitioner and the City of Baltimore was not a lien of a prior encumbrance under the provisions of the Maryland Secondary Mortgage Loan Law. Because we are affirming the decision of the Court of Special Appeals in favor of respondents, we need not to address question two, presented in respondent’s Conditional Cross-Petition.

Facts Ms. Pence resides at 1231 Anglesea Street in Baltimore City. In October of 1984, Ms. Pence needed repairs done to her house. She entered into a Baltimore City Deferred Loan Agreement (hereinafter City Loan) with the Mayor and City Council of Baltimore for a loan of $6,265.00. 6 Ms. Pence had a water leak stopped, new shingles and rain drains installed, her ceiling fixed, and had repairs made to her front porch. The ²⁷¹ loan was recorded in the land records of Baltimore City on December 21, 1984. 7 Ms. Pence testified that she believed that she was giving Baltimore City a lien on her property.

In October of 1991, Ms. Pence and her daughter, Barbara Johnson Jacobs, entered into a mortgage agreement with Banker’s First Mortgage for $30,002.55. On September 30, 1994, Ms. Pence and Ms. Jacobs then refinanced this loan with First Security for $38,500.00 (hereinafter Bank Loan). The Bank Loan originated with Maryland Financial pursuant to a Correspondent Agreement between First Security and Maryland Financial. At the time of settlement on the Bank Loan, Maryland Financial took a Deed of Trust on Ms. Pence’s property as security for the loan.

Maryland Financial then assigned this Deed of Trust to First Security. During the processing of the Bank Loan, Advance Title Services completed an abstract or title search and Valley Title Company completed a title examination. At the time of the Bank Loan, Ms. Pence owed approximately $6,265.00 on the City Loan. Ms. Pence made her monthly payments on the Bank Loan until she became disabled in September of 1996.

Her income was then limited to federal disability benefits and she was not able to make her payments on the Bank Loan. 8 Ms. Pence ²⁷² was then informed by LSI Financial that her property would be the subject of a foreclosure action if she did not make all of the payments that were due on the Bank Loan. Procedural History On September 29, 1997, Ms. Pence filed a Complaint in the Circuit Court for Baltimore City. She brought suit against Maryland Financial, First Security, Access, Michael Fine, Norwest, and LSI Financial, 9 claiming that they had violated the Maryland Secondary Mortgage Loan Law. 10 Ms. Pence alleged that the City Loan was a lien on her property, bringing all of the defendants within the purview of Maryland’s Secondary Mortgage Loan Law. Ms. Pence further alleged that the defendants, violated Maryland’s Secondary Mortgage Loan Law, by increasing her finance charge, her annual percentage rate, and her monthly payments on the loan.

Ms. Pence requested that the court order that the defendants could only collect the principal amount of the loan, asked the court to assess statutory damages as treble damages, and asked that the court enjoin LSI Financial from pursuing foreclosure against her property pending the adjudication of her claims. On January 12, 1998, Access, LSI Financial, and Norwest filed a Motion to Dismiss, for Summary Judgment or to ²⁷³ Strike. In their motion, they alleged that the City Loan to Ms. Pence was not a lien as is required by the Maryland Secondary Mortgage Loan Law, therefore, the Secondary Mortgage Loan Law is not applicable to this case. They also alleged that LSI Financial has no interest in the debt and the outcome of this case.

The motion also contended that Ms. Pence had “unclean hands.” They alleged that at the time of the settlement on the second loan, Ms. Pence committed to removing any prior liens from the property she was refinancing. They contend that Ms. Pence cannot use the City Loan as both a shield and a sword. On January 22, 1998, First Security filed a Motion for Summary Judgment incorporating the motion and supporting authorities of the motion filed by Access, LSI Financial, and Norwest. On January 26, 1998, Maryland Financial filed a Motion for Summary Judgment, also incorporating the motion and supporting authorities filed by Access, LSI Financial, and Norwest.

On January 80, 1998, Ms. Pence filed a Response to Defendants’ Motion to Dismiss, for Summary Judgment or to Strike. In her response, Ms. Pence claimed that the City Loan was a lien that made the Maryland Secondary Mortgage Loan Law applicable to the loan between Ms. Pence and the defendants to her suit. On March 19, 1998, the Circuit Court for Baltimore City denied the Motion to Dismiss, for Summary Judgment or to Strike of Access, LSI Financial, and Norwest. The Circuit Court also denied the Motions for Summary Judgment of First Security and Maryland Financial.

The Circuit Court found that the City Loan was a lien that brought the Maryland Secondary Mortgage Loan Law into play. The Circuit Court stated that: The court is persuaded that the 1984 agreement [City Loan] was a lien of a prior encumbrance. There is no requirement in the Act that a classic mortgage exist. Therefore, there is no necessity of finding some conditional conveyance of an estate, subject to repayment of the loan. ²⁷⁴ A rehabilitation easement is an encumbrance on the property in that it subjects the owner and subsequent purchasers to a particular rehabilitation obligation presently and in futuro.

It is a lien because it burdens the property to that extent, reveals its intended purpose by calling itself a “mortgage” and alerts both future lenders and future purchasers by public recordation. Further, although there is nothing in the record to reveal legislative intent, it is fairly inferable from the portion of the text of the Act in question here, which was unamended in the final text of the Bill, that the General Assembly intended to protect those who were already under some loan obligation affecting the property when they negotiated subsequent loans which would also affect and burden that same property. This case presents that very circumstance. Because the defendants were all on notice of the first agreement and its encumbrance on the property, this result cannot work an undue hardship on them. [Footnotes omitted.] The Circuit Court then found that Ms. Pence did not have “unclean hands.” The City Loan had been recorded in the land records of Baltimore City and the Deed of Trust between Ms. Pence and the lenders stated that “the property is unencumbered, except for encumbrances of record.” The Circuit Court held that Ms. Pence did not have to remove the City Loan because it was an encumbrance of record that was exempted by the Deed of Trust.

On January 20, 1998, a Stipulation of Dismissal was filed, dismissing Michael Fine from the suit. On April 24, 1998, a Stipulation of Dismissal was filed, dismissing First Security from the action. On May 7, 1998, Ms. Pence filed an Amended Complaint against Maryland Financial, Access, and Nor-west, but deleting LSI Financial from the suit. The Amended Complaint made the same allegation that there was a violation of the Maryland Secondary Mortgage Loan Law.

On August 13, 1998, Ms. Pence filed a Motion for Summary Judgment. In her motion, Ms. Pence alleged that the Circuit Court had already found that the City Loan was a prior lien making the defendants in her suit in violation of the Maryland ²⁷⁵ Secondary Mortgage Loan Law as a matter of law. Therefore, in accordance with Maryland Code (1975,1990 Repl.Vol.), section 12-413 of the Commercial Law Article, the lenders should only be able to collect the principal amount of the loan and may not collect interest, costs or other charges with respect to the loan. 11 Respondents filed a Response to the Motion for Summary Judgment on August 28, 1998. In their Response, respondents contended that the motion should be denied because (1) the relief sought by petitioner goes well beyond what is called for in the note or the statute at issue, (2) the State secondary mortgage law is preempted by federal regulations, and (3) petitioner did not reveal to her lenders and loan originators that her house was allegedly encumbered by a previous loan.

On September 9, 1998, Ms. Pence filed a Second Amended Complaint. This complaint added Ocwen to the suit. Ms. Pence alleged that Ocwen was the current servicer of the mortgage loan, which encompasses the right to collect mortgage payments. Ms. Pence included Ocwen in the suit for the purpose of requesting the court to enjoin any collection activity or foreclosure proceedings that Ocwen may pursue.

On December 11, 1998, the Circuit Court for Baltimore City granted Ms. Pence’s Motion for Summary Judgment. The Circuit Court found that the lenders had violated the Maryland Secondary Mortgage Loan Law as a matter of law. The Circuit Court cited the earlier decision of the court to deny the lenders’ Motion for Summary Judgment and found that the decision implicitly, if not expressly, found that the lenders had violated the Maryland Secondary Mortgage Loan Law and ²⁷⁶ that Ms. Pence was entitled to the penalties permitted by-section 12-413. The Circuit Court cited the earlier opinion of that Court that stated: [P]laintiff will be entitled to the relief she has won in this proceeding, i.e., that “Defendants may only collect the principal amount of the loan [less amounts paid by plaintiff on that principal] and shall not collect interest, costs or other charges with respect to this loan.” In addition, plaintiff will be entitled to offset against the principal indebtedness statutory damages in such amount as may be proven by her to her entitlement under the Act. [Alteration in original.] The Circuit Court also found that Ms. Pence was not in default on the Bank Loan and was entitled to a revised amortization schedule, that federal preemption is not in effect in this case, and that Ms. Pence was solicited by Maryland Financial for the Bank Loan so Ms. Pence is not estopped from bringing this suit.

On January 13, 1999, the Circuit Court for Baltimore City signed an Order that clarified the status of the Bank Loan based upon the Court’s granting petitioner’s Motion for Summary Judgment, The Order stated that: ORDERED that the current balance of the loan is $23,198.29, based on the following itemization of partial payments & overpayments: Ms. Pence made payments in the amount of $384.94 for twenty-four months for a total amount of $9,238.56. Ms. Pence also paid settlement charges in the amount of $6,063.15. $9,238.56 + $6,063.15 = $15,301.71. This amount is to be subtracted from the total loan amount. $38,500.00-$15,301.71 = $23,198.29; and it is further ORDERED that no interest or fees will be charged in connection with this loan through its maturity in November, 2024; and it is further ORDERED that the attached revised amortization schedule shall govern this loan through its maturity. ²⁷⁷ On January 21, 1999, Access and Norwest filed a Motion to Alter or Amend the Judgment. On February 17,1999, Ocwen filed a Motion to Alter or Amend Judgment that incorporated the motion filed by Access and Norwest.

The court denied both of these motions. On June 4, 1999, Norwest and Access filed a Notice of Appeal to the Court of Special Appeals. In Norwest Bank Minnesota, N.A. Trustee v. Pence, 132 Md.App. 363 , 752 A.2d 681 (2000), the Court of Special Appeals reversed the Circuit Court for Baltimore City, holding that the Circuit Court erred when it found that the City Loan was the type of a lien of prior encumbrance that triggered the restrictions of the Maryland Secondary Mortgage Loan Act. The Court of Special Appeals stated that: To be sure, we recognize that it is not necessary for the agreement to contain the word “lien” in order to create an equitable 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.” Chaires, 350 Md. at 731, 715 A.2d 199 (quoting 3 Am.

Law of Property § 1320, at 537 n. 4 (A.J. Casner ed.1952)). We are not convinced, however, that the parties intended for 1231 Anglesea Street to serve as security for the City loan. In the first place, Ms. Pence did not convey the property to the City as security for repayment of the loan, nor does the agreement provide for a power of sale, authorizing the City to sell the property upon Ms. Pence’s default. In fact, it is far from clear what the City’s recourse would be if the City loan were ever in default, or even if default could occur.

In Ms. Pence’s agreement with the City, the agreement provides that the City could “take whatever action at Law [sic] or in equity as may appear necessary or desirable to enforce any obligation, covenant or agreement of the Owner under this Agreement.” Under this provision, we assume that the City could file an action against Ms. Pence personally to satisfy the debt. “[I]t would appear that ... for an equitable lien to exist a specific intent to create a lien must be made manifest....” Imbesi, supra at 260, 412 A.2d 96 . ²⁷⁸ This leads us to conclude that the City loan did not create a mortgage, nor did it create an equitable lien. It is not manifest from the agreement that the parties intended for 1231 Anglesea Street to serve as security for the City loan. Id. at 371-72, 752 A.2d at 685-86 (footnote omitted) (alterations in original). Ms. Pence filed a Petition for Writ of Certiorari to this Court and respondents filed a Reply and Conditional Cross Petition for Writ of Certiorari.

Discussion We shall affirm the Court of Special Appeals and hold that the Baltimore City Deferred Loan was not the type of a lien of a prior encumbrance that triggered the restrictions of the Maryland Secondary Mortgage Loan Act. We will first examine the standard for reviewing the granting of a motion for summary judgment. We will then review the nature of mortgages and equitable mortgages. A. Summary Judgment The trial court, in accordance with Maryland Rule 2-501(e), shall grant a motion for summary judgment “if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law.” In the case sub judice, the Circuit Court for Baltimore City determined that there was no dispute of material fact and that petitioner was entitled to judgment as a matter of law.

In reviewing the grant of a summary judgment motion, we are concerned with whether a dispute of material fact exists. Williams v. Mayor & City Council of Baltimore, 359 Md. 101, 113 , 753 A.2d 41, 47 (2000); Hartford Ins. Co. v. Manor Inn of Bethesda, Inc., 335 Md. 135, 144 , 642 A.2d 219, 224 (1994); Gross v. Sussex, Inc., 332 Md. 247, 255 , 630 A.2d 1156, 1160 (1993); Beatty v. Trailmaster Products, Inc., 330 Md. 726, 737 , 625 A.2d 1005, 1011 (1993); Arnold Developer, Inc. v. Collins, 318 Md. 259, 262 , 567 A.2d 949, 951 (1990); Bachmann v. Glazer & Glazer, Inc., 316 Md. 405, 408 , 559 A.2d 365, 366 (1989); King v. Bankerd, 303 Md. 98, 110-11 , ²⁷⁹ 492 A.2d 608, 614 (1985) (citations omitted). “A material fact is a fact the resolution of which will somehow affect the outcome of the case.” King, 303 Md. at 111 , 492 A.2d at 614 (citing Lynx, Inc. v. Ordnance Prods., Inc., 273 Md. 1, 8 , 327 A.2d 502, 509 (1974)). “[A] dispute as to facts relating to grounds upon which the decision is not rested is not a dispute with respect to a material fact and such dispute does not prevent the entry of summary judgment.” Salisbury Beauty Schs. v. State Bd. of Cosmetologists, 268 Md. 32, 40 , 300 A.2d 367, 374 (1973). This Court also has stated that “[t]he standard of review for a grant of summary judgment is whether the trial court was legally correct.” Goodwich v. Sinai Hosp. of Baltimore, Inc., 343 Md. 185, 204 , 680 A.2d 1067, 1076 (1996); see also Murphy v. Merzbacher, 346 Md. 525, 530-31 , 697 A.2d 861, 864 (1997); Hartford Ins.

Co., 335 Md. at 144 , 642 A.2d at 224 ; Gross, 332 Md. at 255 , 630 A.2d at 1160 ; Heat & Power Corp. v. Air Prods. & Chems., Inc., 320 Md. 584, 592 , 578 A.2d 1202, 1206 (1990) (citations omitted). We stated specifically in Beatty v. Trailmaster Products, Inc., 330 Md. 726, 737 , 625 A.2d 1005, 1011 (1993) that “[i]t is thus clear that under Maryland’s summary judgment rule, a trial court determines issues of law; it makes rulings as a matter of law, resolving no disputed issues of fact.” In the present case, there are no disputes of relevant determinative facts. The issue is clearly a matter of law for this Court to determine. B. Mortgage We next describe the nature of mortgages.

In the case of Equitable Trust Co. v. Imbesi, 287 Md. 249 , 412 A.2d 96 (1980), where this Court examined the characteristics of both a formal mortgage and an equitable mortgage, we stated that: Equitable is of the view that the instrument here, “on its face, [is] precisely the type of agreement which creates an equitable lien or mortgage.” ²⁸⁰ We start with the fact that this instrument by no stretch of the imagination can legitimately be called a mortgage and that it does not even purport to be in the form of a mortgage. In Bank v. Lanahan, 45 Md. 396 (1876), Judge Alvey set forth for the Court the characteristics of a mortgage: By the legal, formal mortgage, as distinguished from instruments held to be mortgages by construction of Courts of Equity, the property is conveyed or assigned by the mortgagor to the mortgagee, in form like that of an absolute legal conveyance, but subject to a proviso or condition by which the conveyance is to become void, or the estate is to be reconveyed, upon payment to the mortgagee of the principal sum secured, with interest, on a day certain; and upon nonperformance of this condition, the mortgagee’s conditional estate becomes absolute at law, and he may take possession thereof, but it remains redeemable in equity during a certain period under the rules imposed by Courts of Equity, or by statute. [Id. at 407.] It will be seen that this instrument has in it none of the requisites of a mortgage set forth for the Court by Judge Alvey in that case. Equitable does not say that this is a proper mortgage, but suggests it is an equitable mortgage. Without exception, the instruments which we have held to be equitable mortgages have been ones which on their face appeared to be mortgages but which were defective in some manner.

For instance, in LeBrun v. Prosise, 197 Md. 466, 477 , 79 A.2d 543 (1951), Judge Markell quoted from Dyson v. Simmons, 48 Md. 207 (1878), where Judge Alvey said for the Court: The principle is now so well settled, that it would seem to be beyond all question and controversy, that if a party makes a mortgage, or affects to make one, but it proves to be defective, by reason of some informality or omission, such as failure to record in due time, defective acknowledgment, or the like, though even by the omission of the mortgagee himself, as the instrument is at least evidence ²⁸¹ of an agreement to convey, the conscience of the mortgagor is bound, and it will be enforced by a court of equity. [Id. 48 Md. at 214 .] In Dyson the mortgage was recorded in Montgomery County where the land was situate, but the acknowledgment was taken before a justice of the peace in Frederick County. Our statute at the time required that if an acknowledgment were taken before a justice of the peace “out of the county ... wherein the real estate or any part of it lies,” then “the official character of the justice [was required to be] certified to by the clerk of the circuit or superior court under his official seal.” This certificate was missing. Id. at 258-55 , 412 A.2d at 98-99 (alterations in original) (emphasis added) (footnote omitted). The Baltimore City Deferred Loan Agreement clearly fails as both a mortgage and as an equitable mortgage. 12 We next review the Maryland Secondary Mortgage Loan Law and whether the Baltimore City Deferred Loan triggers the Secondary Mortgage Loan Law.

C. Maryland Secondary Mortgage Loan Law The Maryland Secondary Mortgage Loan Law 13 was enacted by 1967 Maryland Laws, Chapter 390 (Senate Bill 566). Chapter 390 stated: AN ACT to add new Sections 39 to 70, inclusive, to Article 66 of the Annotated Code of Maryland (1964 Replacement ²⁸² Volume), title “Mortgages,” to follow immediately after Section 38 thereof, and to be under the new subtitle “Secondary Mortgage Loan Law”; to generally provide for the licensing of persons in the business of negotiating secondary mortgage loans, and to generally provide for the regulations of such persons and such loans, to give the Banking Commissioner certain duties and powers in the regulation of such persons and such loans, to provide penalties for violations and to generally relate to secondary mortgage transactions and the regulation of persons in this business. The SMLL was later transferred to the Commercial Law Article when the Commercial Law Article was established by 1975 Maryland Laws, Chapter 49 (House Bill 26). As stated, supra, the SMLL is currently codified at Maryland Code (1975, 2000 Repl.Vol.), Title 12, Subtitle 4 of the Commercial Law Article.

In order for the SMLL to be applicable, a loan must be a secondary mortgage loan under section 12-401(i), which states: (i) 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. If a piece of property has a lien of a prior encumbrance, 14 then the SMLL, among other restrictions, restricts the maximum ²⁸³ interest rate that can be charged, the amount of origination fee, and precludes a lender from collecting any other commission, finder’s fee, or points for obtaining, procuring, or placing a loan. Petitioner alleges in her Complaint that the City Loan was a lien of a prior encumbrance. Petitioner claims that respondents violated the SMLL by charging both an origination fee and an additional fee in violation of Maryland Code (1975,1990 Repl.Vol.), section 12-405(a) of the Commercial Law Article.

At the time of the filing of the case sub judice, Maryland Code (1975, 1990 Repl.Vol.), section 12-405(a) of the Commercial Law Article stated: (a) Origination fee. — (1) A lender may collect a loan origination fee not exceeding the greater of $500 or 4 percent of the net proceeds of a commercial loan of $75,000 or less made under this subtitle or not exceeding $250 or 2 percent of the net proceeds of any other loan under this subtitle. However, the lender may not collect from the borrower any other commission, finder’s fee, or point for obtaining, procuring, or placing a loan. Petitioner claims that respondents violated this section by charging a four percent origination fee when Maryland Code (1975, 1990 Repl.Vol.), section 12-405(a) of the Commercial Law Article caps the origination fee at two percent of the net proceeds. 15 Petitioner also claims that respondents violated ²⁸⁴ Maryland Code (1975, 1990 Repl.Vol.), section 12-405(a) of the Commercial Law Article by charging her a $700.00 fee labeled “Loan Discount,” which she feels is an additional fee or commission in violation of that section. 16 Petitioner contends that since respondents are in violation of the SMLL, the Circuit Court should have then looked to section 12-413 for the penalty. Section 12-413 states: § 12-413.

Civil penalties. Except for a bona fide error of computation, if a lender violates any provision of this subtitle 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. In addition, a lender who knowingly violates any provision of this subtitle also shall forfeit to the borrower three times the amount of interest and charges collected in excess of that authorized by law. ²⁸⁵ In accordance with this section, in her Complaint, petitioner requested that respondents “may collect only the principal amount of the loan, and shall not collect interest, costs or other charges with respect to this loan.” We then are called upon to interpret the loan agreement and its relationship, if any, to the type of prior encumbrance that triggers the SMLL. That essentially is a legal, not factual matter, especially given that the facts do not appear to be in dispute.

D. Analysis of the City Loan Under the SMLL In order for the Bank Loan to qualify under the SMLL, there must have been a lien constituting a qualifying prior encumbrance on the title to petitioner’s property. Petitioner contends that the City Loan created an equitable lien that was a lien of a prior encumbrance. Respondents contend that the City Loan was just a loan and did not create a lien on the title to petitioner’s property. The City Loan states, in part: WHEREAS, the Owner is willing to subject the Property to a rehabilitation easement and to the claims of the City for the repayment of the Loan pursuant to the terms and conditions set forth in this Agreement; and WHEREAS, it is agreed that the repayment of the indebtedness evidenced hereby, as well as the performance of the other covenants, terms and conditions herein, should be secured by the execution of this Agreement.

II

The Owner agrees as follows: 1) To repay the Loan and simple interest thereon at the rate of 3% per annum in the event the Property is transferred, sold, assigned or abandoned or if the Owner ceases to own the Property, whether by death, condemnation, operation of Law or otherwise. It is expressly understood and agreed by the owner that upon his or her death, his or her heirs may assume the loan and be subject to the terms and conditions of the Deferred Loan Program.... ²⁸⁶ 7) Upon the occurrence of any such default, NPA/ DHCD 17 may take any or all of the following remedial steps: a) NPA/DHCD may, upon notice in writing that a default has occurred under this Agreement and is continuing, stop making payments hereunder and apply the balance of the undisbursed Loan proceeds to the payment of the Loan and to pay any funds due to the contractor for completed work; and/or b) may declare the indebtedness evidenced and secured by this Agreement immediately due and payable; and/or c) may take whatever action at Law or in equity as may appear necessary or desirable to enforce any obligation, covenant or agreement of the Owner under this Agreement. [Emphasis added.] Only the signature of the City’s representative was attested to on the City Loan agreement. Petitioner points to several factors that she thinks establishes that the City Loan created a lien on her property. Petitioner contends that the language in the loan agreement that “the Owner is willing to subject the Property to a