ATLANTIC CITY - Here in casino heaven, where the ATMs dispense $50 bills, pessimism is against the law. And speakers at a Northeast regional conference of mortgage bankers proved to be a pretty law-abiding bunch.

Joe Pickett, president of the Mortgage Bankers Association of America, said business had been tough for the industry in the past year "but things will turn - it's time for lady luck to come around."

Indeed, the news is mostly good on the legislative front, Mr. Pickett said, with the fate of the FHA remaining the major hazard. In his view, a major positive is the possibility of a cut in the capital gains tax. The MBA president also said support appears to be developing for the use of special tax-exempt bonds with which home buyers can make down payments.

Also, he said, the chance that the Community Reinvestment Act will be extended to nondepositors is fading. And finally, Congress is in the process of modifying the Truth-in-Lending Act to eliminate the kind of problems raised by the Rodash case.

The major legislative negative is the proposals to seriously limit or even dismantle the FHA. He said the national MBA was strongly supporting the continuation of 100% mortgage insurance. "This program is a major priority with us," Mr. Pickett said in announcing that the MBA was launching a publicity blitz in favor of continuing FHA insurance.

The MBA completed a video supporting its position. The tapes should be arriving in members' offices about now, he said, and urged recipients to pass them on to legislators and the media. The tapes can be personalized with the name of the mortgage banker, Mr. Pickett added, and are available in both VCR and broadcast-quality formats.

Felix Beck, former chairman of Chemical Residential Mortgage Corp., and a long-time supporter of the FHA, joined Mr. Pickett in calling for political action to head off drastic changes in the insurance program.

Larry Dale, executive director of national housing impact for Fannie Mae, also offered some encouraging words about regulator initiatives. Speaking of the new political alignment in Washington, he said, "this is probably the most important political change we've experienced in our lifetimes. While I predict dramatic reforms, a lot of what we're hearing about right now will never see the light of day. And a lot of the rough edges that trouble us now will be smoothed."

Turning to the outlook for housing reform, Mr. Dale said there were several aspects that Fannie Mae regarded as vital. He said any reform must extend the benefits of home ownership, not restrict them; that the FHA must continue to play a vital role; and that all efforts must be focused on those most in need of help.

"Housing policy should protect the investment of homeowners," he said, explaining that the $5 trillion of equity that Americans have in their homes is the nation's biggest asset.

Discussing Fannie Mae's outreach program, in which it vows to make $1 trillion of affordable-housing loans over seven years, Mr. Dale said the program had touched 400,000 consumers this year and that the goal for this year is one million. He also said a special effort to reach immigrants would be extended to additional cities after a successful test in Chicago.

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