Entering the back stretch in its four-year-old effort to make consumer protection laws more understandable for consumers and more workable for lenders, the Mortgage Bankers Association is now trying to enlist support of its sister housing financing organizations.

Three groups -- the Consumer Mortgage Coalition, a band of large lenders; the National Association of Mortgage Brokers, and the National Home Equity Mortgage Association -- have already "signed on" to the five-part proposal.

And now the MBA is planning to spend the next six weeks trying to gain the backing "of the entire alphabet soup" of mortgage industry trade groups.

The "key" to gaining Congressional approval for its controversial plan that would revise the Truth in Lending Act and the Real Estate Settlement Procedures Act is "to build a consensus" with other lender groups, said MBA Vice President John Courson.

Courson, who heads Central Pacific Mortgage in Folsom, Calif., and is on the presidential ladder at the MBA, said MBA staffers are now in the process of drafting legislation for the five-part proposal. "We're down to the details," he said.

The MBA official said some lenders might have a problem endorsing that part of the plan that calls for replacing good faith estimates and the annual percentage rate calculation with a guarantee that closing costs would not exceed a set amount.

Under the proposal, consumers would be given a one-page form with a quote that settlement fees and charges would not exceed a certain amount at the time they submit their loan applications. They would receive a "more explicit" guarantee at least twice more during the process, according to Mr. Courson.

To mollify consumer groups, which are worried that TILA and RESPA would be all but gutted under the MBA's guarantee proposal, the plan calls for a three-year phase-in period during which lenders would be free to choose how they want to handle disclosures, either the new way or the current one.

After two years, a study would be undertaken to determine if the guarantee is meeting the needs of lenders and borrowers. If so, all lenders would be required to offer guaranteed pricing after the phase-in period expires. If not, Congress would take other action.

Courson said small lenders should not be concerned about going up against their larger competitors who might be able to pay less for settlement services because of the volume of business they can give service providers.

"The big guys won't necessarily win," the MBA official said, urging lenders of all sizes to look at packaged loan services "as an opportunity." "It's just another pricing point in the negotiation stage," he said. "It's a third element besides rates and points that can be marked up or down." Other portions of the MBA plan include:

• Education -- Consumers would be given a new and "concise, simple" booklet explaining the entire lending process.

• Remedies -- Lenders would have the right to cure their mistakes. They would pay a fine for errors, but they also would be given an opportunity to fix them. If they are not corrected within a year, consumers would be free to litigate.

• Preemption -- For consistency, which Courson said is paramount for lenders who work in more than one state, states laws that are in conflict with the new federal statute would be preempted.

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