Columbia National Inc. Responds to Remarks From HUD Secretary, White House.

COLUMBIA, Md.--(BUSINESS WIRE)--Jan. 18, 1999--Columbia National Inc. is expressing its shock and extreme disappointment over a press release issued by HUD, claiming that an agreement between Columbia National, HUD and the Fort Worth Human Relations Commission is "the largest settlement in history in a lending discrimination (case)."

Columbia National CEO Dave Gallitano says that the only agreement with HUD is to continue the company's mission to bring home mortgage loans to low-to-moderate income families, and that "the statements released by the White House and HUD are inaccurate and very misleading. The figures cited by HUD are in fact the volume of loans we made over the past five years."

HUD officials approached the company in late 1998 and suggested it merely wanted to "close the file" on its review of Columbia National's lending practices in Texas before the end of the year. Columbia National officials agreed without anticipating that the company's good intentions would be used against them in this way

While the agreement arose out of HUD's testing program, as noted in HUD's press release, it contains no admission of wrongdoing by Columbia National.

In addition, Columbia National was told by HUD that there was no finding of any discrimination on the part of Columbia National. In the HUD agreement with Columbia National there were no allegations of wrongdoing against the lender. For HUD to imply otherwise for the purpose of political gain does a disservice to the hundreds of Columbia National employees and to Columbia's customers nationwide.

"We here at Columbia National have a long and proud tradition of serving the needs of all borrowers, particularly low-to-moderate income Americans. We are proud to be part of the solution in addressing the housing needs of American families across the spectrum," Mr. Gallitano says.

"Rather than being a departure from Columbia National's policies, this program is simply a continuation of our company's leadership in developing ventures to generate housing for our country's low-to-moderate income and minority population," says Mr. Gallitano. "This agreement will enhance our commitment to provide products and services that will assist these individuals as they seek to purchase and improve their homes."

Columbia National is one of the nation's leading mortgage companies, offering a wide variety of mortgage products. Located in Columbia, Maryland, the company was founded in 1939 and has offices in 22 states, including Texas.

For additional information, please contact Tom Ireton, General Counsel at Columbia National Inc., at 410/872-2110, or attorney Jeffrey Tillotson at 214/695-5333.