WASHINGTON -- The Department of Housing and Urban Development is "working feverishly" to restructure its fair-housing programs to focus more on loan discrimination, HUD Assistant Secretary Roberta Achtenberg said Wednesday.

She said Housing and Urban Development Secretary Henry Cisneros is examining the department's budget, searching for ways to reallocate staff and resources.

The agency is hoping for a 60% increase in funding for its Fair Housing Initiatives Program next year, said Ms. Achtenberg, who is the HUD official responsible for fair housing and equal opportunity. One function of the fair-housing program will be to send testers into banks to search for lending discrimination.

Attitude Adjustment

"Clearly there's a problem, and the secretary and I intend to address it," Ms. Achtenberg said before to speaking at the annual conference of the National Fair Housing Alliance, a network of housing advocates. "It's one problem that has been put aside for too long."

The secretary has made it clear that lackadaisical attitudes in the agency will change "or else heads are going to roll," she said.

An initiative in Ms. Achtenberg's office to accelerate testing of lenders and enforcement of fair housing laws already has run into an obstacle: finding qualified staff. "We don't have people with sufficient expertise in this area," she said.

Ms. Achtenberg also said the industry can anticipate changes in the Federal Housing Administration. "The secretary has put the agency on notice that a whole host of fair-lending practices may be required of FHA lenders," she said.

HUD hopes to work cooperatively with the bank regulators to end lending discrimination, Ms. Achtenberg added. As a first step, HUD has formed a joint working group with the Office of the Comptroller of the Currency. A report on the group's progress should be ready by the end of the month.

|Vigorous Enforcement'

In her speech, Ms. Achtenberg outlined her plan for a more high-profile and responsive fair-housing office committed to "vigorous enforcement of the laws" as well as "workable and imaginative solutions."

She praised President, Clinton's commitment to HUD's fair-housing initiatives: "The President has assured us he will stand with us and behind us as we do this work."

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