It's been a long, long road for Jess Hay, who recently announced his intention to retire from Lomas Financial Corp., the Dallas company he has headed since 1965.

When Mr. Hay took the top slot at Lomas, fellow Texan Lyndon Johnson was in the White House and the secondary market for mortgages was barely a glimmer in Wall Street's eye.

During his watch, he built the company, formerly Lomas & Nettleton, into the largest and most technologically advanced mortgage bank in the country, only to see it founder in the treacherous waters of the Texas real estate debacle of the 1980s.

Lomas emerged from bankruptcy in 1992. And to the surprise of many, Mr. Hay was still at the heim. The company once again ran into problems when the interest-rate plunge of 1993 caused heavy losses in the company's mortgage loan servicing rights portfolio. This meant heavy losses and ultimately to a decision that many felt was very difficult for Mr. Hay. This spring, Lomas was put on the block - and it remains there.

"The last five years have been challenging, and somewhat frustrating and, all in all, tiring," he said in a recent interview. "I have been ready to step aside for some time."

"I wanted the company to be at a substantially stabilized point," he said, noting that he is confident that it will be able to meet all of its coming obligations.

According to Mr. Hay, a brightening market for Texas real estate will allow Lomas to completely retire the debt of its ST Lending subsidiary by yearend - a debt that in June 1992 stood at $240 million.

This, combined with a dramatic slowing in the prepayment rate of mortgages in the company's servicing portfolio, will put the company in good shape, he said.

Nonetheless, his decision to announce that he will retire at yearend gave rise to a number of rumors - chiefly that he was forced out because he was seen as an impediment to a sale.

"I understand why these things get started, but it's just not so," said Mr. Hay. He points out that if he had been forced out, he would stand to come into a golden parachute that "is a multiple of annual salary and compensation."

Asked about the most compelling changes in mortgage finance during the past 29 years, Mr. Hay cited two trends: "The advent of mortgage securities and the generation of funding for mortgages has created immense liquidity. It's really moved in the direction of becoming a commodity," he said.

Mr. Hay cites developments in technology that have allowed for increasing consolidation in the servicing business. "In 1965, the largest servicing portfolio was $1.1 billion. In 1972, when we became a national servicer, we needed seven regional offices and 35 district offices to handle the work."

And, despite getting the wrong end of a long stick during the refinancing boom, Mr. Hay prefers to look at the big picture. "I'm sorry we ran into that little ditch the last year but it was environmental.

The refinancing that took place over the past two years, though difficult for mortgage bankers, was good for the country.

Putting $100 or $200 dollars a month into the pockets of scores of millions of homeowners was a tremendous boost for the economy," he says.

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