On March 8, 2006 Montgomery County's Predatory Lending Law was scheduled to go into effect. As a result many lending organizations in the area declared that they would limit their lending in the county. On March 7, 2006 a Circuit Court Judge granted a 90-day stay to keep the law from going into effect. Several lending companies have filed a lawsuit asking that the law be repealed and a trial hearing date has been set for July 6 of this year.
Before the stay was granted, Montgomery County Council member Mike Knapp publicly expressed concerns about the provisions allowed by the pending law. “With the refusal of these lenders to do business in our county, there is a very real risk that this legislation will now limit the opportunity for some of our neediest residents to secure a loan – an unintended but very real consequence that was raised during debate on the legislation, and the precise predicament this bill was enacted to prevent."
GCAAR recommends that members check with individual lenders to find out how they will conduct their business while the law is on hold. Already Credit Suisse has announced that it will attempt to close all impacted loans in Montgomery County by July 6, a trend that is expected to continue with other lending institutions. This law affects all our members who do business in Montgomery County and is an imperative issue that GCAAR is dedicated to keeping members informed about. We will continue to report to our members on the status of this law until the controversy is resolved and the long-term effect on the real estate industry in Montgomery County is known for sure.
What You Can Do
Please let us know what you are hearing and how your buyers are being affected. Email Meredith Weisel at email@example.com with your information. If you have a situation or know of a situation where a buyer's loan is being canceled because of this new law, contact the lead sponsor of the bill, Council member Tom Perez, Councilmember.Perez@montgomerycountymd.gov or 240.777.7966.