SAN DIEGO — The Beatles' "Good Day Sunshine" was blaring in the background shortly before the Mortgage Bankers Association's annual convention opened here this week, but it is anything but a good day for the housing finance industry, as speaker after speaker duly noted.

And the sun is definitely not shining on beleaguered mortgage bankers.

"A lot of Elmer Fudds are firing shotgun blasts our way," said the trade group's president and chief executive, John Courson. "Not since the 1930s have there been as many proposed sweeping changes in the way we do business."

Not that the industry has lost every skirmish.

"We pummeled it," the MBA's departing chairman, David Kittle, said in reference to cramdown legislation that would have allowed bankruptcy judges to write down the face value of mortgages to match the sagging values of the collateral.

And according to Kittle, the housing lobby is "very, very close" to persuading Congress to extend an $8,000 federal tax credit for first-time homebuyers.

Without congressional action, the credit, which the Internal Revenue Service says has been claimed by 1.4 million taxpayers, is to expire in 45 days. Rob Story, who is to succeed Kittle as the trade group's chairman, said it had used its hard-won "credibility and respect" on Capitol Hill to extend, if not expand the credit. If the benefit is allowed to expire at midnight Nov. 30, he said, "we risk losing the stability that's creeping into the nation's housing market."

Clearly, the MBA wants to settle on the future of the secondary market and bring liquidity back to the business. Toward that end, the group has put a number of proposals on the table, not as solutions but to frame the forthcoming debate, said Vice Chairman Michael Berman, and "act as a lens through which all proposals can be judged."

But other speakers said the secondary market, and perhaps many other issues, will have to wait until the government and its industry partners get a handle on the foreclosure deluge, which, because of rising unemployment in a still moribund economy, is getting worse.

Edward DeMarco, the acting director of the 14-month-old Federal Housing Finance Agency, said that loan-modification efforts "are going to be with us for a while." His agency's "single biggest challenge," he said, is "loss mitigation and foreclosure intervention."

The shift to loan workouts also could be seen in the rather lean exhibit area at the annual gathering, where the 160 exhibitors failed to fill the cavernous convention center.

Last year, lead-generation companies tended to dominate. This year, there were none, and preeminence went to the specialty servicers who offered to help lien holders contact elusive, seriously delinquent borrowers.

But at least the exhibitor total surpassed last year's, as did the expected attendance, according to MBA Senior Vice President Cheryl Crispen, who said that by the time all the walk-ins were counted, the official tally was likely to exceed 3,000.

Attendance would be much higher had MBA counted what several observers said was a larger than usual number of unregistered participants who worked the convention center halls and hotel lobbies.

Mindful of gate-crashers, the MBA hired the Pinkerton detective agency to stop anyone without a badge from ascending to the meeting area on the escalator from the registration area.

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