Revitalization of cities and the Federal Housing Administration, a continuing fight against inflation and prospects for slightly higher mortgage interest rates surfaced as topics this week when the 4,000-member Mortgage Bankers Association convened here.

To an outsider, the convention mood was obviously upbeat. Mortgage bankers increased their lending for single-family houses last year by 26 per cent and the pace has improved in 1977.

But will the housing boom last? Will mortgage rates rise and cool off potential buyers in 1978? Will thrift institutions hav sufficient funds to finance high levels of new and resale houses?

Conventions seldom provide pat answers to major questions but words from the platforms, in the hallways and at receptions tend to point up certain directions.

For instance, there is agreement that housing starts and resales will continue strong in 1978-but probably below the white-hot levels of 1977. And mortgage rates, already on a slight upturn, might continue that pattern on an irregular course next year.

But here's the key point: Interest rates are not expected to rise sufficiently to turn off mounting consumer conviction that home investments are more secure and rewarding than other investment options.

As never before, said economist Henry Kaufman, a partner in the Salomon Brothers investment banking firm, homeowners and buyers are certain they are making the best of all possible financial decisions when they purchase houses for the first time or sell and move up to more expensive houses. Kaufman insisted that no absolute mortgage interest barrier currently exists, in psychological terms, to turn off buyers automatically in large numbers. He said they are accepting [TEXT OMITTED FROM SOURCE]

Also, there seems to be general confidence in the investment world that mortgage funds will be sufficiently available to meet consumer needs next year. One reason is the introduction of private, mortgage-backed securities that will bring new investment(particularly from pension funds) capital into the mortgage market.

Nonetheless, there are also some educated fears of distermediation-that situation where thrift institutions lose funds to competing investments (often government obligations) at higher yields. Several members of a panel of 10 mortgage experts from around the nation expressed cognizance of the threat at a press conference held during the convention.

In fact, Robert J. SPiller, president of the Boston Five Cents Saving Bank, indicated that thrift institutions are even now on the threshold of disintermediation. In speaking about the Boston area, which traditionally exports savings to capital-short areas(such as Texas and the Northwest), Spiller reported a slowing rate of deposits with no net inflow in recent weeks. His view was supported by MBA members from New York and New Jersey.

On a more upbeat note, mortgage bankers from Chicago, the Northwest, Texas and the South reported strong markets in all categories except the construction of new rental apartments.

And Donald M. DeFranceaux, head of the DRG mortgage banking firm in the District, described "a significant shift to in-city living in both new and rehabilitated houses." He added that there is evidence of increased investor interest in acquiring rental apartments and office buildings and noted that lack of investor incentives in new apartment construction has resulted in "bidding up" of values placed on existing rental properties in the national capital area.

In reflecting what he described as a healthy economy in Texas, Eli A. Sturges of Southern Trust and Mortgage Co. in Dallas said that increasing population and home building booms have resulted in higher housing prices in both Dallas and Houston. However, he commented that 1978 should be a good year for housing but not at the boom level that could lead to a bust. "Our builders and developers have gained a sense of reasonable caution," he insisted.

As the 64th convention of mortgage professionals wound won, a new leadership was apparent. New directions in both leadership and philosophy seem to be in the making. John C. Opperman, a slim, intense and city-minded San Franciscan, was installed as elected president. And MBA members also got a brief glimpse of Mark J. Riedy, 35, who has been confirmed as the new executive vice president to head MBA's 70-member, Washington-based staff.

As of Dec. 16, Riedy, who is vice president and chief economist of the Federal Home Loan Bank Board in San Francisco, will officially succeed Oliver H. Jones as top executive of the MBA staff.