Some of the nation's senior mortgage banking executives are raising a yellow flag about subprime lending.

At a Mortgage Bankers Association conference in New York last week, Christopher J. Sumner, president and chief executive officer of Crossland Mortgage Corp., Salt Lake City, blasted the mass marketing of high-loan-to- value programs to consumers who already are overburdened with debt.

"Dan Marino, in the twilight of his career and after a bunch of poor playoff performances, is pushing 125 LTV mortgages," he said, in a jibe at FirstPlus Financial Group, the largest high-LTV lender, which has hired the Miami Dolphin quarterback as a spokesman.

With bankruptcy an easy option for the consumer, Mr. Sumner said, pricing credit risk is more important than ever.

Another industry challenge, Mr. Sumner said, is a more familiar one- resolving regulatory issues about disclosure in order to make getting a mortgage easier for borrowers and less paper-intensive.

"We have probably been responsible for the defoliation of the world," Mr. Sumner said. "We continue to bludgeon the consumer with information they don't understand."

Stuart A. Feldstein, president of SMR Research, cited lack of profitability as another key concern. Mr. Feldstein said the government agencies that buy mortgages, Fannie Mae and Freddie Mac, are far more profitable than mortgage lenders and that lenders need to do something to "prevent the two agencies from absorbing literally every dollar of profit" in the industry.

Despite the gloomy tone of some speeches, those at the conference, mainly high-ranking executives of mortgage banks, were confident that 1998 would be a good year for the industry.

Mr. Feldstein said reverse mortgage programs have the potential to increase lenders' origination volume by at least 20%. Geared to senior citizens, reverse mortgages let homeowners receive payments using the equity in their homes as security.

Saiyid T. Naqvi, president and CEO of PNC Mortgage Corp. of America, said that if rates remain as low as they are, origination volume can match or even exceed the record $1 trillion year of 1993. And Mr. Naqvi said the industry is more prepared to handle this volume.

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