A proposed investigation of the credit practices of mortgage bankers by the Federal Trade Commission has been welcomed by Kennon V. Rothchild, president of the Mortgage Bankers Association.

Rothchild responded to FTC Commissioner Elizabeth Hanford Dole's announcement that an FTC investigation will seek to determine whether "non-despository" mortgage lending institutions deny loans because of race, impose more stringent conditions on loans for non-white families or refuse to make mortgage loans to qualified female heads of households.

The FTC's staff will look at other forbidden discriminatory lending practices.

Rothchild pointed out that mortgage bankers have been striving to stamp out discriminatory lending practices.

The MBA spokesman cited the association's Fair Loan Availability Guaranty. He said MBA's industry-wide FLAG pledge goes beyond the requirements of the Civil Rights Act of 1968, by declaring a policy that rejects discrimination by MBA's members in an extended list of mortgage loan processes such as receiving a loan application; underwriting analysis applied to the loan decision; the amount of loan-to-value ratio offered to the borrower; the amount of loan discount required; the various escrows and fees required at settlement, and the handling of loan servicing during the life of the mortgage.

Rothchild also cited the fact that mortgage bankers have originated in excess of 90 per cent of the loans made under the HUD subsidy programs of Section 235, 236 and 221(d)(3).

He also cited the industry's affirmative handling of credit applications from woemen, over the last two years, through Equal Credit Opportunity Act seminars designed to instruct MBA members in procedures that assure equal treatment to both the male and female applicant for mortgage credit.