The sharp rate changes in the mortgage market during the past four weeks -- a 1 1/2 percent rate increase followed by a 1-point dive -- have restocked a consumer issue simmering since late spring:

Home loan applicants in most states still have no legal protection against "lock-in shock" -- 11th-hour rate switches imposed by lenders, or foot-dragging that causes rate commitments to expire.

Those same roller-coaster rate patterns, though, have focused new attention on a gripe lenders have with consumers: When rates plummet, loan applicants often toss their commitments out the window. They walk away from loan agreements they'd signed up for as soon as they hear cheaper money is available.

That's the "incredibly frustrating part of this whole period" in mortgage financing, according to the senior vice president of a major lender with offices nationwide. In one recent three-day period, his mortgage banking firm's prevailing 12 percent quotes for home loans dropped to the low 11 percent range.

One-half or more of the loans that borrowers committed to (at the higher rate) "are now going to fall out of the pipeline," he predicted. "That's a costly situation for us as an operating business. People would scream bloody murder if we raised their rates when the cost of our money goes up. But they don't give a second thought about backing out of loan agreements when rates go down -- despite the fact that we may have already locked ourselves in to sell those loans at a specific price."

In effect, he said, "we give {borrowers} a one-way option: Heads you win, tails we lose."

The mortgage banker, who requested that neither he nor his firm be identified, put his finger on a problem that's in the hands of Congress. The House Banking, Finance and Urban Affairs Committee is expected to set up hearings on legislation proposed by Rep. Dean Gallo (R-N.J.), the Residential Mortgage Credit Fairness Act of 1987.

The bill, which has a tilt in the favor of borrowers, would amend the federal Truth-in-Lending Act to require that no lender could "impose terms and conditions ... which are less favorable to the consumer" than the ones quoted at the time of the original application disclosure.

It also would ban the use of rate "lock-ins" by lenders tied to some specific expiration date or time span. In other words, once you received a lock-in or guaranteed rate quote, it wouldn't expire. That, argues Gallo, would eliminate foot-dragging by lenders on closing lower-rate loans in rising-rate mortgage environments.

Lenders would have a federally sanctioned safe haven under the bill, however. If they wanted the freedom to change the terms of their commitment to a home-loan applicant before settlement, they'd merely have to indicate that in a "clear and conspicuous statement" in their standard documents. The statement would make clear that the quoted rate, fees and other terms are "subject to change before any credit is actually extended."

Other key provisions of the legislation include: A three-day cooling-off period for borrowers to withdraw from the loan-commitment process after seeing the disclosed terms.

A stiff $10,000 maximum fine for lenders who break the law.

An exception from the mandates of the new rules when the borrower -- not the lender -- causes "unreasonable delay" that knocks the settlement off schedule.

Home buyers and those refinancing their homes in a handful of states already enjoy legal protections similar to or stronger than the federal standards contemplated under the bill. During 1987, Minnesota, Maryland, Connecticut and New York either enacted state laws or took regulatory steps to ensure that a lock-in is a lock-in, a rate commitment is a rate commitment, no matter what happens to rates in the economy at large. Other states are considering similar steps.

Wherever you live, though, bear these points in mind this fall:

If you're quoted a mortgage rate over the telephone, or if you apply for the specific rate noted in your real estate sales contract, don't assume that you're locked in at that level. To the contrary: Assume that you're not unless you see a printed, signed statement that binds the lender to a specific rate.

Ask the real estate agent to get involved on your behalf to ensure that the rate you're quoted is one you can bank on. The agent or broker should know the latest state legislative and regulatory requirements on the lender. After all, it's in his or her interest to make certain you get the rate you need. There's no sales commission if there's no settlement.

Finally, play fair with your lender, even if you have to grit your teeth. A loan commitment is a contract that's binding on both sides. If you sign up for 11 1/2 percent and rates go to 10 1/2, don't violate your contractual responsibilities. One of these days, lenders are going to start suing borrowers who do.