A long-neglected kind of home loan is getting a new lease on life at some thrifts.

As thrifts get more desperate to maintain loan volume, the no-closing-cost loan is in vogue again, along with other exotic models.

"You hear it from your customers when they come in,,, said Alan R. Howell, a vice president at First Federal Saving Bank of Elizabethtown in Kentucky. "They ask, `Y' all don't have any loans with no closing costs?' No closing costs is starting to get hot."

In response, the thrift is now formulating such a product.

Mr. Howell said First Federal would offer a no-closing-cost loan in about a month.

Many lenders said they would be more inclined to offer the loan if there, were some sort of prepayment penalty attached.

First Federal will try to attach a one- or two-year prepayment penalty to its no-closing-cost. loan, Mr. Howell said.

Banks pick up many of the customers' charges in a no-closing-cost loan but reap a higher interest rate.

Fees for appraisals, title searches, and title recording, among others, are covered by the lender.

Third Federal Bank, Cleveland, is one of the largest thrifts to begin offering the loan. Another Cleveland banker said Third Federal's no-costs home loan was introduced with much fanfare a few months ago but has been a quiet performer.

A Third Federal brochure trumpets the loan as especially useful to first-time homebuyers who don't have a lot of up-front cash for a down payment and other expenses."

The bank picks up all points, application fees, and closing costs except for title search.

But some lenders are reluctant to offer no-closing-cost loans.

Gerald Goldberg, executive vice president of Ohio Savings Bank, Cleveland, said the loan could be a popular product but is too risky for the lender.

Borrowers are so sophisticated and inclined toward refinancing, he said, that the only way the. loan could be profitable and safe for the lender @ be with a prepayment penalty.

"If rates dropped a 1/4% or 1/2%, why wouldn't they refi?" he asked rhetorically.

At First NH Bank, Manchester, N.H., a one-year, adjustable-rate loan with no fees or closing costs goes for 9.125%, compared to an average rate of 6.88% with 1.19 point charged on one-year adjustables, according to HSH Associates, a Butler, N.J., research company.

First NH has a no-cost loan, but Robert W. Brady, president and chief executive, does not consider it the answer to the bank's lending doldrums. He said he considers the loan's rate too high.

For the same reason, Acacia Federal Savings Bank, Annandale, Va., will not introduce a no-cost loan, said F. Weller Meyer, president and chief executive.

"You need rates to come down," said First NH's Mr. Brady.

"More than anything, that would help the market."

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