MBA Sees 'Chilling' Effect From MD Law

The Mortgage Bankers Association says a pending law in Maryland will have a "chilling" affect on lenders and loan investors working in the state's most prosperous county because it affects both the primary and secondary markets.During a March 6 press briefing, the trade group also blasted Montgomery County executive Douglas Duncan -- who is running for governor -- for not vetoing the law. (The county executive is not related to Doug Duncan, the MBA's chief economist.) Passed by the Montgomery County Council, the law in question carries a minimum penalty of $500,000 per violation for discriminatory lending practices. The bill has stirred controversy because it penalizes lenders for charging "excessive" fees without defining what excessive means. To date, 40 lenders have decided to curtail lending in the county, at least for now. On Tuesday a judge will consider a motion to block the law. Standard & Poor's said it analyzed the ordinance but concluded that investors have no "assignee" liability. Still, the MBA says it believes investors are weary, despite S&P's conclusion. The MBA can be found online at http://www.mortgagebankers.org.