While others project 1997 as a strong year for mortgage lending, an analysis by Experian suggests the business is off by about 5% from last year.

The Anaheim, Calif., real estate information company found that from January through June business dropped 5% from last year in 27 states and the District of Columbia.

Analyst Nima Nattagh of Experian says the trend will hold up for the rest of the year and across the nation.

The finding is at odds with other surveys, including one by the Mortgage Bankers Association that says loan originations in 1997 will be up almost 7% from last year, to $839 billion.

Mr. Nattagh says his projections are more reliable because they're based on data from "every single mortgage deed recorded" in major metropolitan areas in 27 states and Washington, D.C., in the first half of 1997. The areas covered by the study contain two-thirds of the nation's single-family homes.

Most other groups base their projections on samples of mortgage originations.

Experian, which is also a large credit bureau, sends an army of laptop- toting employees to municipal courthouses to pore over the deeds in some states, Mr. Nattagh said. Most send a microfiche of the recorded documents to Experian.

Experian's numbers are broken down into purchase and nonpurchase originations.

Mr. Nattagh said the deed data suggest purchase originations will be up about 3% in the studied areas, with larger increases in California, Massachusetts, Connecticut, New York, and Washington, D.C.

But nonpurchase originations, which include refinancings, home equity lines, and second mortgages, will be 13.7% lower than last year and push down overall volume.

The 27 states covered by Experian's deed study are: Arizona, California, Colorado, Connecticut, Delaware, Florida, Illinois, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, Utah, Virginia, Washington, and Wisconsin.

In those states, Experian projects overall volume this year will be $439.8 billion. Of that, $253.1 billion will be purchase originations and $186.8 billion will be nonpurchase.

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Separately, the Clinton Administration announced last week that a record 66% of Americans owned homes in the third quarter. The previous record- 65.8%-was set in 1980.

Andrew Cuomo, secretary of the Department of Housing and Urban Development, said homeownership rates have gone up because the economy is strong, consumers are confident, and the Clinton Administration has launched many initiatives to increase homeownership.

Among the government programs he credited were the FHA, his department's regulation of Fannie Mae and Freddie Mac, the Community Reinvestment Act, and the enforcement of fair housing and fair-lending laws.

Mr. Cuomo said the homeownership rate went up because more minorities, female-headed households, and urban households bought homes.

Recently bank regulators, including the Comptroller of the Currency, have raised concerns that home loans to moderate-income Americans might default at higher rates than mortgages to other borrowers-particularly in a recession.

Mr. Cuomo said the issue of credit quality is "important" and "obvious."

"We talk about it all the time," he said. "The question is one of balance" between extending credit to more borrowers and maintaining credit quality.

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