For the past decade a small cadre of bankers, insurance companies, social workers and elderly homeowners have struggled to negotiate loans that would allow senior citizens who are "house-rich but cash-poor" to unlock the equity in their homes.

But despite their efforts, pioneers in the field say that little progress has been made in popularizing what are known as reverse annuity mortgages (RAMs) -- where homeowners borrow money against the equity in their house -- or other programs that would allow the elderly to liquidate home equity.

Chief among the reasons for this is the suspicion of many elderly people -- a suspicion shared by some government officials -- that the programs offer too many opportunities for consumer fraud.

At a conference on home equity conversion sponsored by the Department of Housing and Urban Development here earlier this week, lenders and public officials with experience in such programs shared successes and advice; and berated consumer advocates who have questioned whether such programs really work to the benefit of the aged.

"I tire of those of you who are over-zealous on behalf of the consumer, because the consumer won't have a product unless we make some progress," said James Burke, president of the American Homestead Corp., Prudential-Bache Securities' RAM program. "You can care as much as you want about the problems with RAMs but there won't be solutions without capital. The solution is on the capital side."

There are two types of home equity conversion programs in existence today: RAMs, in which the elderly homeowner keeps title to his house but borrows against it; and sale-leasebacks, in which the elderly person sells or gives the house to someone else and then is allowed to live in it at a set rental rate for the rest of his life.

But industry sources say that the few programs available are thinly scattered and usually written for a small segment of the market.

For federal and local officials, home equity conversion programs are seen as a possible key element in the effort to reduce the public cost of health and housing programs for the elderly.

Lenders are attracted to the idea because the potential market is enormous. The 1983 annual housing survey done by the U.S. Census Bureau found that there were 13 million elderly homeowners in the United States with an average net equity of $50,000 each, which means that there is $650 billion in equity tied up in the homes of senior citizens.

But both groups admit that the effort to develop a home equity conversion program that would appeal to most elderly homeowners has not been successful, and that if they are going to work at all they must be carefully geared to the specific needs of individuals and local market conditions.

Lenders have resisted writing RAMs because they see themselves shouldering all the risks. There is the risk that the elderly person's home will decrease in value due to a failing real estate market or physical decay. If the lender guarantees life tenancy for the senior citizen, there is the risk that the homeowner will live longer than the actuarial tables predicted at the time the loan was written.

But as state and federal authorities work to rewrite laws so that home equity conversion programs would be more attractive to lenders and the elderly, consumer and elderly groups have derailed efforts in some states and were instrumental in blocking a bill introduced in Congress last year.

The federal bill, introduced by Sen. Arlen Specter (R-Pa.), would have cleared up tax uncertainties in sale leasebacks by allowing the elderly seller to take the one-time capital gains exclusion on his house and would have allowed the buyer to deduct rent and depreciation on the house from his taxes.

The bill also would have established a federal insurance program for RAMs to protect lenders, similar to the mortgage insurance offered by the Federal Housing Administration. But the legislation failed, largely because House members felt there weren't enough consumer safeguards included and that the bill lacked support from advocates for the aged.

In Maine, which has the oldest housing stock in the nation and a real estate market that appreciates slowly, RAMs have been unpopular since one of the first RAMs written in the state resulted in the elderly homeowner being kicked out of her house by the local lender. After having received a monthly annuity from the lender, the term of the loan ran out, and because the woman's house had not appreciated in value, the bank foreclosed.

"The problem with RAMs is finding a way to guarantee lifetime tenancy for the elderly person," said Patricia A. Riley, director of Maine's bureau for the elderly. "There are still a lot of elderly residents who remember the Depression and what it means to put a lien on their property, and they are reluctant to do that."

In Minnesota, where 60 percent of the state's welfare budget is going to pay nursing home bills, efforts to make home equity conversion programs work were met with only lukewarm interest from elderly groups.

"As I talked with senior citizens' groups trying to line up support for changes in the state program I found them very concerned about this becoming a mandatory thing, that they would be required to sell their house and pay for services they get free from the state today," said Monte Aaker of the Minnesota Housing Finance Department. "There's real potential for cross-purposes."

In Buffalo, a city-sponsored program has solved the long-term housing problems for 65 elderly homeowners, 83 percent of whom are below the federal poverty level. In exchange for an annual annuity figured from the value and future appreciation of the elderly person's house and their expected longevity, the elderly homeowner gives the city his house. The city takes care of all maintenance of the house until the elderly person dies and then resells it so that it can finance more loans.

While proponents of the Buffalo program touted its virtues, other state and local officials said that they have found few elderly people willing to sell their house away from their heirs.

"For most elderly their house is their only asset to leave their children," said Riley. "Most of them don't want to part with it outright, but would rather liquidate part of the equity."

Many of the speakers at the conference agreed that an essential element to getting home equity conversion programs working is counseling provided to the elderly by third-party participants, someone with no financial interest in the senior citizen's decision.

"Can you imagine any elderly homeowner being able to figure out if any of these plans fit their needs," asked Don Ralya, of the San Francisco Development Fund, a group that has received 50,000 inquiries and closed 120 RAMs as part of a demonstration project for the Federal Home Loan Bank Board. "They are more complex than adjustable rate mortgages."

Some of the insurance company representatives, however, said they thought some of the consumer advocates were practicing "ageism" by assuming that the "vulnerablities of the elderly person are greater than their abilities."

"Many elderly are capable and resourceful enough to get their own counselors," said Abbott A. Leban of American Homestead.

Some of the local officials and consumer advocates, however, said that RAMs and equity conversion programs would have to include strong consumer protections if they are to get support from federal and state officials. Riley, from Maine, said that one elderly homeowner from York Beach who was investigating a RAM had been told her house was worth $20,000.

"The house, which is beachfront property in one of the resort areas, was actually worth $130,000," said Riley. "If she hadn't come to us she would never have known."