Heralded as the successor to the refi boom, home equity lending took center stage in Washington last weekend.

More than 150 people headed to the nation's capital for the Consumer Bankers Association's 1994 home equity lending conference. And what they heard could be summed up in one word: marketing.

If home equity lending is going to live up to its promise as the post-refi savior, the panelists said, banks are going to have to refine their marketing strategies to lure customers in an increasingly competitive market.

The wake-up call came from Bruce Schmidt, director of marketing for Advanta Mortgage Corp., San Diego, which specializes in home equity loans and low-credit-quality lending.

Mr. Schmidt told bankers in the audience that many of their customers "want to be my customers" because banks were sometimes inflexible with loan terms, provided poor service, were slow to respond, and were often discourteous.

Advanta targets its customers so precisely, Mr. Schmidt said, that he can tell you the most minute details about each family on a block. He can use that information to direct his marketing materials only to households that are most likely to borrow against the equity in their homes.

An attendee later remarked that Mr. Schmidt's presentation showed bankers how far they had to go to beat the competition. Advanta was "so far ahead of the curve," with its marketing efforts, he said, that bankers need to "get on the ball or get left behind."

Ethnic marketing was the buzzword at the conference. CBA set up three workshops to show bankers how they could penetrate the African-American, Asian, and Hispanic mortgage markets, which have made gains in home ownership.

There was also a recap of the CBA's 1994 survey on home equity lending. The study's author, Richard DeMong, director of the University of Virginia's Center for Financial Services, said that while opportunity is still out there the business is fiercer than ever.

Among the findings, Mr. DeMong warned, was that many banks were in danger of making next to nothing if they continued to waive fees in order to attract new business.

The study showed that average fees on home equity lines of credit were about $325, and 67% of lenders were waiving up to $286 of that.

Outside the room Joe Mundwiler, senior vice president in charge of consumer lending at Guaranty Bank, Brown Deer, Wis., complained about "predatory pricing."

"Banks' have a way of wringing the profitability out of everything," said Mr. Mundwiler. "With any other product you could talk around the price, but with this everyone wants to give everything away."

While banks are out on the street fighting for market share, make sure everything is running smoothly at home, advised Michael H. Cox, vice president in charge. of the consumer finance center for U.S. Bank, Portland, Ore. Loan Underwriters need to be more responsive to the needs of, the branch reps that are out in the trenches generating loan volume, he said.

"The underwriting centers have to be responsive to the needs of the branches or it's not going to work," said Mr. Cox. "The same promise of service that you make to your customers has to be expressed within your own organization."

George Yacik, a vice president with SMR Research Corp., Budd Lake, N.J., told attendees they should be concentrating their business in states like Washington, Pennsylvania, and North Carolina where home prices and homeownership are up, and 60% of the population is between the ages of 35 and 60, the prime age group for home equity lending.

But while all the presenters were touting the rewards, Lynn Baft, a partner with the law firm Goodwin, Procter & Hoar, advised bankers to be careful what fees they tack on to some of the "no points, no cost" home equity loans many were advertising. A glaring example is the appraisal review fee that some bankers add when they dispute the accuracy of appraisals done on properties in low-income neighborhoods.

Ms. Barr's response to one bank that had persistently tacked on the fees was "let me look at the demographics of some of these homes you're questioning, because you may have a fair-lending issue here."

But the real razzle-dazzle of the conference was unveiled by Microsoft Corp., which previewed its simplified applications for loans via interactive television.

One banker was overheard mumbling to another, "It's kind of scary, isn't it?"

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