The U.S. Court of Appeals for the Fourth Circuit in Richmond, Va., turned down last week a request from Crestar Mortgage Corp. and Saxon Mortgage Inc. for dismissal of a suit against them.

The suit, which charges the two Richmond-based lenders with violating provisions of the Real Estate Settlement Procedures Act, is the first of dozens of such cases to reach court.

The case will now return to U.S. District Court for the Eastern District of Virginia, in Alexandria. Albert V. Bryan Jr., a judge in that court, had also declined to dismiss the suit and rattled lenders when he appeared to take a strong stand against broker fees. But he softened that statement in a later clarification. Judge Bryan has a reputation for rapidly moving cases through the court.

The appeals court's decision "really underscores the need for some kind of moratorium on class certification (of these cases)," said Leonard Bernstein, counsel for Crestar.

Legislative relief is on the way. Rep. Robert L. Ehrlich Jr., R-Md., plans to introduce legislation soon that would impose such a moratorium, according to his office. Rep. Ehrlich is a member of the House Banking Committee.

The National Association of Mortgage Brokers has been lobbying heavily for Congressional intervention, while the Mortgage Bankers Association of America has been pressuring the Department of Housing and Urban Development to step in.

The class action lawyers say a moratorium bill is unlikely to deter them from pursuing litigation. "I'm already prepared to pursue the claims from a breach of fiduciary duty standpoint," said Edward O'Brien, a Nashua, N.H.- based lawyer.

"If we can't resolve these cases on Respa, we'll go on to the next thing," Mr. O'Brien said. If the moratorium does go through, he said, he is also prepared to file state-by-state class actions against lenders.

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