An emergency measure to lift the state-imposed 10 percent ceiling on home mortgage interest rates survived a major test in the Maryland Senate today as two amendments drafted opponents of the bill were soundly rejected.
After a lengthy debate during which senators on both sides of the issue constantly invoked the cause of "the little guy," the Senate defeated on amendmert that would have made the bill effective for only two years and another that would have raised the ceiling to 11 percent rather than lifting it altogether.
Opponents of the no-ceiling concept, led by Sen. Julian Lapides (D-Baltimore City), could muster no more than 13 votes for either of the amendments and conceded that the emergency bill probably would pass the Senate with the required two-thirds majority when it comes up for a final vote next week.
The home mortgage interest bill has been the most heavily lobbied issue of the 1979 General Assembly session. Bankers, real estate brokers, developers and many home buyers have besieged the legislators with pleas to lift the 10 percent ceiling, which they claim is so low that the home mortigage market has virtually dried up in the state.
Although these special interests have all come out in support of lifiting the ceiling, the issue has not been fought along ideological or geographical lines within the General Assembly. There are liberals and conservatives and legislators from suburban Washington and Baltimore on both sides.
Lapides, who represents the fashionable Bolton Hill section of Baltimore, argued that lifting the 10 percent ceiling would allow lending institutions to "gouge the small home-owner... Sometimes," he said, "we forget that we're sent down here to represent the people, not the banks."
Another Baltimore liberal, Senate Majority Leader Rosalie S. Abrams, said Lapides was acting "paternalistic," and that the only ones who can obtain home mortgages in Maryland under the current ceiling are the middle-class and wealthy who can afford substantial down payments.
"Everyone wants to talk about the little guy," Abrans said. "Well, we're protecting him so much that he cannot buy a house. The average individual looking for housing is denied the opportunity in this market. What we're doing here is enabling people who want to buy houses to buy them."
Economic Affairs Committeee Chairman Harry J. McGuirk (D-Balltimore City), the floor leader of the bill, supplied the senators with charts and documents that he said showed how Maryland's home mortgage market compared unfavorably with neighboring Virginia, where there is no interest rate ceiling. McGuirk's statisties showed, among other things, that the homeguilding rate in Fairfax County last year was nearly five times greater than in Montgomery County.
Traditionally, the movement to lift the interest rate ceiling has been led by the legislators of suburban Washington, where the demand for and cost of housing have been greatest. But three of the eight senators from Prince George's -- Tommie Broadwater, John J. Garrity and Thomas V. Mike Miller -- supported Lapides' amendments.
"The only reason the banks aren't lending money in Maryland now is that they knew the pressure was on," said Broadwater, who represents a predominantly black district in Prince George's. "They knew that we'd be back here raising the rates for them."
A bill identical to the Senate's will get its first hearing in the House Economic Matters Committee Thursday. Several House leaders said the concept of lifting the ceiling for only two years may get a warmer reception there.