WASHINGTON -- The mortgage banking industry has erupted in protest over a plan that would force mortgage companies to lend in poor areas.

Mortgage bankers say the plan - put forth last week by the nation's top thrift regulator - would hike costs substantially and drive smaller companies from the business.

"I think the position is outrageous," said Angelo R. Mozilo, vice chairman of Countrywide Credit Industries, the nation's largest mortgage bank.

He and others called the plan a thinly disguised effort to help thrifts win back market share lost to mortgage banks in recent years.

"Savings and loans have been weak sisters, unable to effectively compete with mortgage bankers," Mr. Mozilo said, "and therefore reach for every crutch to bolster their ability to compete."

Treasury Comments Echoed

The plan was floated last week by Jonathan L. Fiechter, acting director of the Office of Thrift Supervision. Though not officially a Clinton administration plan, Mr. Fiechter's ideas echo public comments by senior Treasury officials.

Speaking to a thrift group in Michigan, Mr. Fiechter said nonbanks that sell loans to federally chartered Fannie Mac and Freddie Mac should have "to reach out to all segments of the communities in which they operate."

He proposed that Fannie Mac and Freddie Mac - formally the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp. - keep track of the lending records of their customers and refuse to do business with those who fall short.

In sum, mortgage banks would be put under requirements similar to those imposed on banks and thrifts by the Community Reinvestment Act.

Mortgage banking companies have lined up against the plan quickly and forcefully.

"As independent businessmen, we're regulated to death," said J. Winston Brown, president of Traditional Mortgage Corp., Atlanta. "This would put us out of business."

Mr. Brown said his small company faced fierce competition from banks drumming up loans in the inner cities. He said he would be forced to sell his company if he had to meet lending quotas in such neighborhoods.

"CRA was designed for institutions that gather deposits in the inner city," added Herbert B. Tasker, chief executive of All Pacific Mortgage Co., Concord, Calif. "It is inappropriate for mortgage bankers."

Cost Factor Cited

Terrance G. Hodel, president of North American Mortgage Co., said the plan would make it harder for mortgage bankers to expand into new markets. "If every time you opened new offices, you had to serve an entire metropolitan area, it would raise costs" substantially, Mr. Hodel said.

Despite such concerns, activists say they are certain that Congress will address the matter in its next session. As a result, organized lobbying efforts are already moving into high gear.

The issue is working its way to the top of the activist agenda, said Deepak Bhargava of Acorn. And the Mortgage Bankers Association of America is fighting back furiously.

The day after Mr. Fiechter spoke, the mortgage group dashed off a memo slamming the plan as "deeply flawed" and "ill conceived."

Fannie Mac and Freddie Mac have steered clear of public comment. But stock analysts following the agencies worry that the plan could backfire and hurt shareholders through higher costs and riskier loans.

"If there's a quota system, there's a risk" that the agencies could end up with bad loans, said Gary Gordon, an analyst at PaineWebber Group.

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