The elite of the mortgage industry, assembled here last weekend for an annual gathering, heard a mixed forecast of economic conditions for the rest of the year.

William C. Dudley, director of U.S. economic research for Goldman, Sachs & Co., told the group of more than 100 lenders that the housing market will remain strong, interest rates will remain low, and inflation will be nearly nonexistent.

Mr. Dudley added, though, that there are some negatives.

"The economy will slow down as the year unfolds," he said. "Consumption, capital spending, and trade will all be down."

Mr. Dudley pointed out that the savings rate, which had fallen to zero because of the strength of the stock market, is likely to rise during the year, bringing consumption spending down.

Because production capacity now far exceeds demand, capital spending will also slacken, he said. And trade will be pulled down by the economic problems of Latin America.

A plus for lenders, he said, is the steadiness of interest rates, which should slow down refinancings and reduce the drain on servicing portfolios. He expects the Fed to ease rates in the summer.

And sales of new homes will continue to be vibrant, he said. Unemployment continues to sink, and compensation of private-sector workers has been surging.

At another session, Paul S. Reid, executive vice president of the Mortgage Bankers Association, took a different view of refinancings. He presented data indicating that only about half of the loans eligible for refinancing have been refinanced so far, so he believes the boom is only halfway through.

The invitation-only conference, Midwinter 99, is sponsored by Richard T. Pratt, a former chairman of the Federal Home Loan Bank Board.

On the panel with Mr. Dudley was T. Timothy Ryan, chairman of the global real estate coordinating committee at J.P. Morgan & Co.

Mr. Ryan was head of the Resolution Trust Corp., which helped clean up bad loans after the thrift crisis of the 1980s. He said the successful workout strategies used in the United States during that period were unlikely to be effective in Japan.

"Japanese banks are reluctant to request public funds for fear that the government will impose stringent restructuring plans and remove management responsible for extending problem loans," he said. And while the smooth nationalization of two major Japanese banks improved market confidence, the markets are still skeptical about the quality of disclosed bank assets.

In another session, Andrew Davidson of Andrew Davidson & Co., said a liquidity crisis last year had been especially hard on home equity lenders and mortgage real estate investment trusts.

"The crisis sent the home equity lenders into the arms of banks, just as the independent mortgage companies were driven to the banks earlier," he said.

He compared the home equity lenders to the second-grader who said, "I can spell banana if you can tell me when to stop."

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