Lenders reacted with caution to news that the Clinton administration may seek to reshape the Federal Housing Administration.

They are mainly worried about how severely the housing agency's guarantee program for home loans to borrowers with low and moderate incomes may be reduced.

"From an overall view, this change could be a good one, depending on the extent of the government involvement in the guarantee process," said Thomas C. Brown, president and chief executive of Centerbank Mortgage Co. in Waterbury, Conn.

At Source One Mortgage Services Corp. in Farmington Hills, Mich., James A. Conrad, president and chief executive, said, "For those that are big lenders in the FHA business, I would think it would be a kind of a traumatic impact. There are people that have that niche. It would be shocking" to them.

But some lenders say there might be advantages. Richard M. Duncan, executive vice president of Resource Bancshares Mortgage Group Inc., Columbia, S.C., said that he would be in favor of a change if it would result in streamlining the origination process for loans.

He also said an adjustment period would be necessary if the elimination of the Federal Housing Administration as a backer of single-family loans is to work.

"In general, it is hard to believe that you can overnight wipe out a program that has impacted so many Americans favorably," said Mr. Conrad of Source One.

Lenders seem most concerned about how the change would affect servicing income from FHA loans. Lenders currently enjoy revenues of 44 basis points from FHA loans. Conventional loans generally pay about 25 basis points.

A cut in servicing income for FHA-type loans under the new system "would be cause for alarm," said Centerbank's Mr. Brown.

He said the new system would have to make allocations in servicing income for the riskier loans.

But most lenders thought that politically the FHA could not be dissolved completely.

The proposal "is going to start off like an Empire State Building and it will end up like something else," said Robert Garman, senior vice president of Directors Mortgage Loan Corp. in Riverside, Calif. "I have very serious doubts that it will ever get done in our lifetime."

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