WASHINGTON - The nation's largest home mortgage lender more than doubled its loans to minorities in 1994, and virtually eliminated the dis- parity among races in its loan denials.

Countrywide Funding Corp., which a year ago was the first mortgage lender to sign an anti-discrimination agreement with the Department of Housing and Urban Development, announced Wednesday that its purchase loans to African-American borrowers rose 325% from 1993 to 1994, while loans to Hispanics increased 163%, and those to Native Americans 200%.

"We've always said, if people try they can do it," said Betsy Julian, HUD's acting fair-housing chief, who joined Countrywide executives and other HUD officials at a press conference here.

In 1991, minority applicants were twice as likely to be rejected for Countrywide housing loans as white applicants. In 1994, African-American applicants were 1.1 times as likely to be rejected by Countrywide as white applicants, while Native American and Hispanic applicants were less likely to be rejected than white applicants.

The Pasadena, Calif., company accomplished the lending changes by opening new offices in inner-city areas, relaxing some lending standards, devising new loan products, and creating a counseling center for prospective homebuyers. "We feel that this will be ultimately very good business for us," said Angelo R. Mozilo, Countrywide's chairman and chief executive.

If accurate, Countrywide's lending numbers are "really to be applauded," said John Taylor, president of the National Community Reinvestment Coalition, which in December gave the company failing grades for its lending to minorities. "If Countrywide can go from a poor job in serving minorities to doing a good job, that puts the heat on other mortgage companies to do the same."

Mortgage companies are now exempt from the Community Reinvestment Act, which requires banks and thrifts to meet low-income and minority lending goals. Some in the banking industry want mortgage firms to be covered by the CRA, and have criticized the voluntary fair-lending agreements that Countrywide and several other mortgage companies have signed with HUD in an attempt to avoid coming under the act.

Mr. Mozilo brushed off such criticism. "The CRA is irrelevant to us," he said. "Mortgage bankers do not strip-mine communities. We only put money in; we don't take it out. So it really doesn't apply to us."

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