Robert L. Ehrlich, Jr. press release, April 11, 1997

NEWS FROM Robert L. Ehrlich, Jr. Second Congressional District of Maryland 1 407 York Road, Suite 304 Lutherville, Maryland 21093 315 Cannon House Office Building Washington, D.C. 20515 FOR IMMEDIATE RELEASE: CONTACT: Richard Cross April 11, 1997 202-225-3061 Ehrlich Introduces Bill To Protect Consumer Access to Home Loans Congressman Robert L. Ehrlich, Jr. has introduced bipartisan legislation that will preserve access to competitive loans for many first-time and low-income homebuyers by freezing class-action lawsuits against the mortgage broker industry. In Maryland, mortgage brokers perform a valuable service for homebuyers. Many first¬ time homebuyers do not have the cash on hand to pay high closing costs on home loans. Currently they have the option of arranging a no-cost or no-point loan through a mortgage broker. The future of these kinds of loans, however, have been thrown into doubt because the U. S. Department of Housing and Urban Development (HUD), which already requires disclosure of lender-paid fees, has yet to issue a clarification regarding their legality. Because of HUD’s failure, plaintiffs’ lawyers have filed fifty class action lawsuits against mortgage brokers. These suits are squeezing many buyers out of the market as many lenders reconsider working with brokers, thereby eliminating affordable loans. “These class action suits threaten homebuyers as much as they do mortgage brokers,” Ehrlich stated. “Many jobs within the mortgage broker industry will be unfairly jeopardized. As a result, consumer access to affordable mortgages will be lost, and fewer loans for low-income