Seventeen area savings and loan associations yesterday announced the creation of a committee to review appeals from metropolitan area residents who believe they have unfairly been denied a home mortgage loan.

The home loan review committee will consist of four members representing the public interest, and four members - plus a non-voting chairman from the savings and loan industry. It will be the 16th home loan appeals board in the nation.

The Washington review committee plan was met with immediate criticism from some people active in housing locally, who complained that the new committee, to be established by January, allows for no citizen input into such things as choosing committee members.

The new review committee will have no power to force a savings and loan association to grant a mortgage loan it has already refused or one that is referred to it by the committee.

Robert F. McConkey, president of the Metropolitan Washington Savings and Loan League, yesterday took note of the criticisms. "We know that some will feel we could have done it differently, but this represents our best efforts," McConkey said.

At a press conference yesterday morning, loan review committee chairman T. William Blumenauer Jr., president of Columbia Federal Savings and Loan said that the participating savings and loan associations represent every S&L with a home office in the city plus one with headquarters in suburban Maryland.

"One problem facing us - as it has faced mortgage review boards in other cities - is how to reach the people of the inner city to assure them they can have a "second chance," Blumenauer said.

The loan review committee, designed for people applying for mortgages of less than $75,000 for either a single-family home or a home with one income-producing apartment, will work this way. Blumenauer said:

When an applicant is denied a home loan, he will be given a pamphlet explaining his right to a review at the time of rejection, along with an application form to the review committee. He will have 10 days in which to request committee review, and the appeals board will make its decision within 15 days after that.

The loan review committee has no enforcement powers, but can recommend reconsideration of the application or modification of the loan terms. If the applicant still is turned down by the original S&L, the loan committee will try to find another S&L among the member organizations to grant the loan.

In testimony last summer before the Senate Banking Committee, Robert H. McKinney, chairman of the Federal Home Loan Bank Board, said he believes that mortgage review committees have not been completely successful in the cities that have them. "Complaints have not been filed, and I believe that subtle discrimination has continued in some areas without proper redress," McKinney said.