Federal Home Loan Bank Board Chairman Richard T. Pratt warned savings and loan associations today not to use all the deposits they receive from new money market accounts created by Congress to make long-term, fixed-rate mortgages.

Pratt recommended that savings associations diversify their lending to avoid repeating the past mistake of putting funds that can be withdrawn in a few months into 30-year mortgages.

In what he termed a "state of the union address" at the annual convention here of the National Savings and Loan League, Pratt said opportunities for savings and loans have never been so good.

Recently passed legislation has given the industry both the tools to compete in the long run and the time to survive in the short run, Pratt said. But he warned that, if savings and loans continue to do business the way they used to, they cannot expect government to bail them out again.

The Depository Institutions Act of 1982, which President Reagan is expected to sign this week, creates new types of accounts so savings associations can compete with money market funds. If the accounts succeed in luring away much of the $100 million now in money funds, savings associations could have trouble absorbing the funds, Pratt warned.

The possibility of massive shifts of dollars out of uninsured money market funds back into depository institutions could present a substantial problem for S&Ls, he said. If savings associations choose to put all the cash into mortgage loans "simply to get the fees up front," it could "push down interest rates to unreasonably low levels," Pratt warned.

He encouraged the savings associations to use the new funds for a variety of loans, including short-term and variable-rate mortgages.

At a press conference after his speech, Pratt was asked if the government could be forced to give new assistance to savings and loans that use the new powers injudiciously.

"We would hope that they would take a more balanced approach" toward investing the new funds, he said. "Management is going to have to manage its asset-liability structure better than in the past. One cannot expect government assistance each time there is a problem. That [congressional bail-out] is a one-time situation."

Savings and loans now pay market rates on 69 percent of their deposits, with the rest earning the 5 1/2 percent passbook rate. Pratt estimated that half of the passbook money will be shifted into the higher-yielding accounts within the next two years. He conceded that paying higher rates could raise the cost of funds somewhat for S&Ls, but said he expects that the dip in market rates and the inflow of new funds will make the outlook for profitability good next year.

In another major development, Anthony Frank, chairman of First Nationwide Savings of San Francisco, announced plans to set up a franchised savings and loan network in conjunction with Atlanta-based Bank Earnings International. The proposed First Savings Alliance would allow independent S&Ls to compete with their large institutions in much the same way franchised real estate networks compete with nationwide realty firms.

The franchise proposal amounts to de facto interstate branching. Frank was formerly chairman of Citizens Savings in San Francisco, which became the first coast-to-coast thrift when the bank board allowed it to merge last year with troubled S&Ls in New York and Florida.

Franchisees would get a nationally advertised name, could offer interestate customer transactions at branches and automatic teller machines, and could reduce operating costs, he claimed. Such a network could compete with the bank franchise originated last year by First Interstate Bancorp and already established in 11 states.