The Mortgage Bankers Association has hired a prominent public relations firm to bolster its image among consumers.

Goddard-Claussen, a Washington firm known for the "Harry & Louise" television ads that skewered the Clinton administration's health-care proposals, will design a radio and print advertising campaign for the association. The firm also will write a manual for members about communicating with the public.

Explaining the hiring, Ron J. McCord, president of the trade group, said, "The MBA has done a good job communicating with the industry, but not the public.

"The good things we do will be the backbone of our message," he said.

The trade group has taken heat on several consumer issues in recent months. Its members have been targeted in lawsuits that allege they paid illegal referral fees to mortgage brokers for loans.

Just last month, Mr. McCord got a tongue-lashing from Sen. Alfonse D'Amato, R-N.Y., in a Senate hearing on whether consumers should be allowed to drop private mortgage insurance on their low-down-payment loans once they have built up enough equity.

That's an issue that most directly concerns mortgage investors, such as Fannie Mae and Freddie Mac. But Mr. McCord was making the case that the MBA's members, who process the monthly payments, don't want to be saddled with all the administrative costs of an insurance repeal.

On both issues, Mr. McCord said the trade group would fare better if consumers understood how the mortgage process actually works.

Mr. McCord said that outdated laws, such as the Real Estate Settlement Procedures Act, which govern the payment of fees in the sale and financing of homes, are part of the problem.

"They've served the industry well over the years, but the marketplace has changed since the '70s, and we now find ourselves, because of the vagueness of Respa, open to class action lawsuits," he said.

Consumers-even first-time homebuyers-appear to be better educated about the home loan process, but are probably still unsure of how brokers and lenders work with each other, said Sharon Rich, a financial planner in Belmont, Mass.

Another planner, Peter Speros, of Sullivan, Bruyette, Speros & Blaney in McLean, Va., said even sophisticated homebuyers continue to be confused by the multiple fees in buying a home.

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