It is 2:30 in the morning, and George Foreman is on TV peddling home equity loans.

"I know what it's like to have money problems," the ex-heavyweight champ says. "But Beneficial Texas can help."

For Texas homeowners who cannot sleep and need cash, late-night television offers plenty of options lately.

Once home equity loans became legal in Texas in early November, big nonbank lenders trotted out their big marketing guns in the state, using big-name sports figures to pitch second mortgages for anything from debt consolidation to college tuition.

Channel-surfing Texans are asked to ponder whether their loyalties lie with Mr. Foreman-a fellow Texan; with Miami Dolphins quarterback Dan Marino or former Pittsburgh Steelers quarterback Terry Bradshaw, who have now teamed with FirstPlus Financial Group Inc. and Associates First Capital, respectively; or possibly with Jim Palmer, the former Baltimore Orioles star who pitches home equity loans for Money Store.

Banks and smaller lenders hoping for a piece of the home equity action in Texas are fighting back with noncelebrity television spots, direct mail, and radio campaigns.

Beneficial, Associates, and FirstPlus are following a tradition that Union, N.J.-based Money Store started years ago when it hired ex-New York Yankee shortstop Phil "Scooter" Rizzuto to peddle second-mortgage loans.

Hiring a sports legend to do your television commercial is a "matter of the demographics," said Anne Morgan Moore, president of Synergistics Research, Atlanta.

Finance companies target consumers with lower incomes and asset levels, who will respond more readily than bank customers to sports heroes, Ms. Moore said.

"It's a way of cutting through the clutter of advertising," she said. "It gives a product credibility. If they get the right person with the right image," a home equity lender's pitch is "no different from Nike or Coca-Cola."

Lenders that are spending big money on household-name spokesmen are expecting Texas to give a substantial boost to origination volume in 1998. The state has 6% of the nation's 57 million homeowners, second only to California.

But hiring a former athlete is not the only way to hawk home equity loans in Texas.

NationsBank, which has the largest bank presence in the state, is using print advertisements coupled with a "warm, user-friendly" television ad, a bank spokeswoman said.

The ad features a young woman who talks about what a good product home equity loans are, the spokeswoman said.

"Our overall goal is to get the customer into the bank, so we can sit down and make a financial decision with them," she said.

As of Jan. 14 NationsBank had already closed $250 million in home equity loans, said Susan Carr, an investor relations officer.

Banc One Corp.'s Texas bank is using a combination of radio and print ads to sell home equity loans, a spokesman said. The bank is taking in about 1,000 applications a week through its 190 branches in Texas.

On Sunday Bank One Texas kicked off a four-week newspaper, radio, and billboard advertising blitz, said Chris Spencer, communications manager.

The ads emphasize the convenience of taking out an home equity loan with Bank One, Mr. Spencer said. "One of our ad headlines is: 'No matter which phone you use, you'll get a home equity loan decision before you hang it up,'" he said.

Household International has eight offices in Texas and plans to open 22 more this month, said Craig Stream, the Prospect Heights, Ill., lender's investor relations officer. Household already has 600,000 customers in Texas who own homes, he said.

The lender is not hiring any sports personalities to sell home equity products, Mr. Stream said.

Aames Financial Corp. has opened four offices in the state since mid- December and is using direct mail to target homeowners with lower credit quality.

The Los Angeles-based company isn't planning to hire a celebrity to sell loans, said director of marketing, Michael Seigel. "The question is, will one more sports star make a difference? Can the consumer differentiate?" he said.

Aames has not projected volume figures for Texas originations this year, Mr. Seigel said, because no one knows how banks and savings and loan institutions there are going to handle the loans. "There's definitely a lot of pent up demand there," he said, but Aames' volume depends on how strict banks and thrifts are about credit quality.

Small banks are sticking to print ads and direct-mail solicitation. Alexandria, Va.-based Pentagon Federal Credit Union, which serves the military community in San Antonio through two branches, is mailing to all of its Texas customers. "We're offering the same equity product we promote everywhere else," a bank spokeswoman said. "We're just encouraging homeowners to apply and encouraging education."

Some of the state's smallest lenders are planning to offer the loans but have opted not to spend any money advertising them. "We're just going to let the big guys take care of that," said one.

Meanwhile, those that did not get prelicensed in the state are resigned to watching from the sidelines for a while, as Mr. Foreman, Mr. Marino, Mr. Bradshaw, and others hawk home equity products for competitors.

Jeffrey Larsen, chief executive of First Street Mortgage Corp., Jacksonville, Fla., said lenders that apply now are being told that it may take nine months or more.

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