WASHINGTON — It turns out the dam is still standing.

Despite Sen. Charles Schumer's confident prediction last week that an agreement with Citigroup Inc. on mortgage bankruptcy legislation would bring other banking companies on board, industry sources said Friday that they would press for a narrower bill.

For instance, the American Bankers Association is arguing that only nontraditional mortgages should be eligible for bankruptcy protection.

"A key point here is that this focuses on all mortgages," said Floyd Stoner, the ABA's head lobbyist. "A lot of the mortgages that caused the financial crisis were nontraditional mortgages that most banks in America did not make. We believe that is an appropriate focus. … Having nontraditional mortgages subject to cramdown in bankruptcy is an effective way to prevent a recurrence of the focus on these nontraditional mortgages."

Industry lobbyists are also pressing for a sunset date on the legislation, better protection of Federal Housing Administration loans, and a stronger requirement that other modification efforts be pursued before a bankruptcy filing.

Under the Citi deal, a borrower would have to contact the lender to seek a modification at least 10 days before filing for protection from creditors. Several lobbyists said lenders need more time.

"Citi's an important player, but we've got virtually a unanimous position from the rest of the industry that thinks this is the wrong way to go," said Bill Himpler, executive vice president of federal affairs for the American Financial Services Association.

Citi did persuade lawmakers to limit the bill only to loans originated before the enactment date. Though lenders have opposed the bill for two years, several lobbyists conceded that Citi's agreement weakened their bargaining position and gave the bill new momentum. Most say they will need to reach some sort of compromise.

Democrats, who have strengthened their majorities in Congress and are poised to seize the White House, have made allowing judges to modify mortgages in the bankruptcy process a priority.

"With the Democrats having such large margins in the House and the Senate, it was already going to be an uphill battle to stop bankruptcy reform," said Jaret Seiberg, an analyst with Stanford Group Co. "Citigroup's endorsement of the legislation makes that task infinitely more difficult."

Many industry sources argued that Citi was wrong to cut a deal on its own — and that the company should have pushed for more concessions. "I understand why Citi negotiated this, but I wish they'd gotten a better deal," said one industry lobbyist.

Another said Citi had alienated colleagues in the industry. "The words I've heard and others describe is livid, infuriated, exasperated. There ain't a whole lot of love out there for Citi."

Several sources said Citi is not in a position to lead the industry on the issue.

"I don't know what kind of standing Citi has in the industry," said Ron Ence, vice president of congressional relations at the Independent Community Bankers of America. "We have a company, along with others, that has engaged in reckless lending in the past … and now they want to cut a deal."

A spokesman for Citi did not comment by press time.

The other large banking companies also stayed quiet. Representatives from Wells Fargo & Co. last week referred calls to the Mortgage Bankers Association, which remains adamantly opposed to the bill.

A spokesman for JPMorgan Chase & Co. would not discuss the Citi deal. A Bank of America Corp. representative did not return calls seeking comment.

The Financial Services Roundtable, whose members include Citi, also remains opposed to the mortgage bankruptcy bill.

"Every company has to do what it has to do," said Scott Talbott, executive vice president of the roundtable. "The rest of the industry opposes the current bill, so they at this point are alone."

Citi did not have much leverage after receiving $45 billion from the Treasury Department's Troubled Asset Relief Program, and the New York company did generate some good will among lawmakers.

"Citigroup, by agreeing to this, managed to change its perception on Capitol Hill," said Mr. Seiberg. "They went from being an example of what was wrong with the industry to the white knight that is willing to help troubled borrowers. That's a pretty dramatic turnaround."

Adam Levitin, an associate professor at Georgetown University Law Center, said opponents of the legislation face high hurdles.

Other lenders "can fight this, but they're going to have a much more difficult position to argue," he said. "When they say this will hurt the stability of financial institutions, the response is going to be, 'Well, here's Citi saying this. If Citi really thought that, they wouldn't be signing on to this.'"

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