Virginia Mortgage & Investment Co., one of the area's larger lenders, has closed one office in Maryland and plans to close another on Friday because the current mortgage rate situation has made those offices unprofitable, according to a company employe.

The firm's Marlow Heights office was closed about two weeks ago, the employe said, and its Montgomery County location is scheduled to shut down on Friday. Officals of the firm wouldn't return a reporter's phone calls yesterday to confirm the report.

The company isn't facing bankruptcy or serious financial problems, the employe said, it is just retreating from business of originating mortgages in Maryland. Business will continue through its Arlington office, the employe said.

Many lenders are facing problems and are pulling out for awhile, according to local economists who said more closings should be expected in the next few weeks.

"People are just pulling out of the market," said Walter Preston, publisher of Financial Services Guide, a weekly magazine. "Then they come back. Some people go to Florida and say, 'I'll just pull back for awhile."

The Virginia Mortgage employe also said the firm is experiencing a change in ownership.

In the past few weeks, mortgage interest rates have soared up to 15 percent, local economists said. In addition, with VA and FHA loans, which have an interest rate ceiling of 12 percent set by the government, the home seller must pay points to make up the difference between the government rate and the market rate. One point is one percent of the mortgage cost.

The employe, as well as local economists, said that the number of points is now at about 15, forcing a person selling his home to an FHA or VA homebuyer to pay 15 percent of the mortgage. And prospective buyers seeking conventional mortgages can't afford the high interest rates.

"It's very sad and it's very frightening," the employe said.

Mortgage rates keep going up because the Federal Reserve Board, in attempts to curb inflation, raises the discount rate, the rate at which it lends to institutions. That rate was increased recently from 12 percent to 13 percent.

Economists say that plenty of loan money is available, but its's just too expensive.

"Lenders want to let the market stabilize before they get back in," said Victor Peeke, of Interest Data Reports, which comprises mortgage information. "A lot of lenders expressed to me that they want to wait and see."

The mortgage business "was fairly stable for awhile," Peeke said. "But this past week a few lenders are out of the market. We'll see a lot more dropping out in the next few weeks.

"In the last week almost every lender went up on their (interest) rates," Peeke said. The average rate for a mortgage with a 5 percent or 10 percent down payment is 14 percent, Peeke said.

"A consumer can't buy the same house he could last year," Preston said. For instance a $50,000 mortgage at 13.5 percent interest would cost a buyer $572 a month in principal and interest, Preston said.Last year at 11 percent the same mortgage would have cost $476 a month.

The Virginia Mortgage employe said the firm's employes are trying to arrange for the company's mortgages to be taken over by other firms. "We're trying not to leave anything unfinished," the employe said.