Plaintiff seeks a recovery in the amount of $1,750 from defendant mortgage company on a claim that "points" paid by the seller of property amount to nothing more than a usurious exaction by defendant in violation of the statute.
The parties have stipulated to the following state of facts: On December 16, 1969 defendant issued a commitment to Mrs. Amy Moses to grant a mortgage loan on premises at 519 Avon Avenue, Irvington, New Jersey, in the sum of $17,500. The commitment was for the making of a mortgage loan eligible for insurance by the Federal Housing Administrator. The commitment contained a provision to the effect that it was subject to plaintiff's (seller) agreement to pay a placement fee in the sum of $1,750 to defendant.
On February 4, 1970 the $17,500 mortgage was granted to the said Mrs. Moses, and plaintiff paid defendant the $1,750 placement fee no part of which was charged directly or indirectly to Mrs. Moses. The loan was insured by the Federal Housing Administrator.
Plaintiff owned the premises in question and had entered into a contract of sale for the property with Mrs. Moses. Thereafter, as per the stipulation, the mortgage commitment issued from the defendant company to Mrs. Moses, clause 8, providing that
This commitment is subject to Sellers acceptance of a placement fee in the sum of $1750.00 to be paid by them to us at closing.
It is about this clause, and the payment thereunder, that plaintiff complains. She claims that the payment made and the amount collected by defendant was beyond the original 7 1/2% agreed to by the borrower, and the payment made by plaintiff and received by defendant is usurious in violation of N.J.S.A. 31:1-1, as amended, which reads in pertinent part:
(a) Except as otherwise provided by law, no person shall * * * take, directly or indirectly, for loan of any money, * * * above the value of six dollars ($6.00) for the forbearance of one hundred dollars ($100.00) for a year * * *.
In other sections of the statute there is an allowable 8% interest permitted by the Commissioner of Banking and the Advisory Board.
A prohibition against usurious exactions did not exist at common law. The existing statutory prohibition by its very nature exists solely within the framework of the statutory provision regarding it. See In re Greenberg , 21 N.J. 213 (1956).
Defendant answers that there is no loan from it to plaintiff and therefore there is no exaction of usurious interest from her. This theory presupposes that any monies the lender receives by way of return must of necessity come from the borrower himself. This court flatly rejects that construction; it matters not from whence the lender accepts his return.
There is a paucity of law on the question as presented, and a diligent search by both counsel and the court has unearthed little by the ...