40 Lenders Leave MD County Over Bias Law

At least 40 mortgage firms -- and counting -- will no longer fund loans in Maryland's most prosperous county because of a new anti-discrimination law that carries a minimum penalty of $500,000 per violation.As of MortgageWire's deadline on Friday, the Montgomery County anti-discrimination law was a chief topic of conversation at the Maryland Association of Mortgage Brokers show in Baltimore. Thomas Shaner, executive director of the MAMB, told MW that the ordinance -- set to take effect March 8 -- is "poorly worded, vague, and greatly enhances the exposure to" residential first- and second-lien funders there. "We're all for ways to fight discrimination, but this isn't it," he said. The American Financial Services Association and seven county brokers have filed suit to prevent the law from taking effect. A hearing is set for March 7. Among other things, the law penalizes lenders for charging "excessive fees" or financing single-premium credit life insurance. Mr. Shaner, whose group opposes the law, said the bill does not even define what "excessive" means. He said his members, including many Hispanic and Korean brokers, are "livid" over the law. At least 125 mortgage bankers fund in the county (not counting the 40 who just left).