Some lenders, but not many, are offering new variations on tried-and-true mortgage products.

Conventional wisdom says that now is not a good time to bring new home-loan products to market, said Keith Gumbinger, a spokesman for HSH Associates, a Butler, N.J., firm that tracks mortgage rates nationwide.

The costs involved in marketing a new idea are "so expensive, particularly at a time when the profits of most financial institutions are in the dumpster," Gumbinger said.

American Residential Mortgage is one lender, though, that believes it has found a way to turn the Washington area's soft real estate market to its advantage. A week ago, American Residential unveiled its "Listing Power" program targeted at sellers upset with the prospect of reducing their asking prices too much.

The program gives sellers the option of paying a borrower's mortgage principal and interest for up to six months. The lump sum often works out to less than the price reduction a buyer might otherwise extract, said Dave Hershman, the lending firm's regional vice president.

Moreover, sellers might be able to attract more buyer interest in their homes by borrowing a page from auto dealers and furniture stores by advertising "no payments until March," Hershman said.

Perpetual Mortgage Co., the Washington area's largest mortgage lender, is finding that the market slowdown is giving it the breathing room it needs to properly launch an accelerated mortgage processing system that it claims is a coup for the Washington market.

By early next year Perpetual Mortgage plans to make mortgage approvals with no strings attached within 48 hours and loan closings within a week, said C. William Blomquist, president of the company. Two months ago it began a trial run of the program using its Gaithersburg office.

"This will not help the builders with a lot of vacant inventory so much as it will the out-of-town buyers, and there's still a lot of them, who have to make decisions quickly," Blomquist said.

Usually an appraisal delays the loan-decision process, but Perpetual Mortgage has found a solution. It has put together a database that will supply virtually all of the property information needed to quickly make a comparative appraisal of a specific property. Perpetual Mortgage will send a representative to verify that the house is standing.

The company has the capacity to produce 9,000 mortgages a year, but Blomquist said he believes that Perpetual Mortgage can double that figure without adding staff members by using the accelerated system.

In a similar vein, Countrywide Funding Corp., a nationwide lender with an branch office in Springfield, earlier this year began offering a unique guarantee: If it does not deliver funding for a mortgage within 20 days, it credits the borrower with $250 at closing.

The Federal National Mortgage Association (Fannie Mae), which buys mortgages from primary lenders and packages them as securities for sale to investors, last week introduced a new type of adjustable-rate mortgage with monthly payments tied to changes in the interest rate paid on six-month certificates of deposit.

Certificate of deposit-oriented adjustable-rate mortgages (ARMs) should become readily available by Nov. 1 now that the secondary mortgage market company is willing to buy the loans.

A business opportunity, rather than the condition of the real estate market, prompted the timing of the new product announcement, said Frank Demarais, Fannie Mae's director of product development.

Fannie Mae found the product when Bank of America, a large California-based commercial bank, wanted to sell the agency some CD ARMs. Fannie Mae analysts soon realized that the loan's appeal was not limited to the West Coast, the only place where it is generally available, Demarais said.

Consumer familiarity with CDs should give borrowers a better understanding of what is behind the adjustments to their mortgage payments than the commonly used cost-of-funds and Treasury indexes, Demarais said.

Demarais said he expects CD ARMs to carry slightly lower rates than ARMs tied to the Treasury rate or a cost-of-funds index. In today's market, that would place the starting rate on a CD ARM at about 8 percent, Demarais said.

Over time the CD index has generally paralleled the Treasury rate index, although it responds somewhat more sharply to movements in interest rates.

With fewer mortgage takers on the horizon, some financial institutions are trying to entice existing borrower customers to open other accounts.

A relatively new "cross-selling" tool, which several banks in the Washington area are expected to embrace soon, lays outs all of a company's financial services, from checking and savings accounts to retirement trusts to mortgages, in a catalogue, said Robert Clayton, president of Dot Systems, a Denver-based company that produces more than 30 catalogues for financial services clients.

The idea is to provide customers with a directory of services, with a glossary of terms, that they can refer to throughout the year, Clayton said.

A down market is not, however, the only explanation as to why only a few lenders are creating new products, said Peter Maselli, a vice president with the Federal Home Loan Mortgage Corp. (Freddie Mac), also a secondary mortgage buyer.

With mortgage interest rates moving in a fairly narrow band over the past 18 months, the climate has not been conducive to change, Maselli said.

"When rates are stable lenders are left with the same old recipes," he said.

Several economists said they do not see interest rates changing enough through the end of the year to inspire lenders to become any more creative.

The worst-case scenario they cite would involve the escalation of the Persian Gulf crisis into a shooting war. If that happens, Fannie Mae chief economist David Berson said he expects interest rates to surpass the 11 percent mark. Rates now are about 10 percent for a 30-year fixed-rate mortgage.

If the threat of a shooting war diminishes over the next few months, the mortgage picture will likely improve, said Lyle Gramley, chief economist for the Mortgage Bankers Association of America. Effective interest rates would likely recede by the half percentage point they have risen since Iraq invaded Kuwait last month, he said.

John A. Tucillo, chief economist of the National Association of Realtors, said he expects to see mortgage rates rise by a third of a percentage point to a half percentage point over the next six to eight weeks and then fall back to current levels. His advice to borrowers is to lock in fixed-rate mortgages for 90 days if possible or defer locking in a rate for a couple of months.

..........Loans Based on Down Payment of 20 Percent............

.................. Sept. 26 ... Points* ... Sept. 19 ... Points

Atlanta ..............9.75 ......1.625.........9.875 .....1.25

Boston ..............10.25 ......2.00.........10.125 .....2.00

Chicago .............10.00 ......2.75.........10.25 ......2.25

Dallas ..............10.00 ......2.50......... 9.875 .....2.50

Denver ...............9.875 .....1.875.........9.875 .....1.625

Houston ..............9.75 ......1.75.........10.25 ......0.875

Los Angeles .........10.25 ......2.00.........10.25.......2.00

Minneapolis .........10.00.......1.375........10.00.......1.375

New York ............10.50.......2.125........10.50.......2.125

Philadelphia ........10.00.......2.25.........10.00.......2.375

Phoenix....... ......10.25.......1.50.........10.00.......1.75

Seattle .............10.375 .....2.125........10.25.......2.00

Tampa ............... 9.75.......3.125.........9.875......3.00

Washington ..........10.25.......2.75.........10.00......3.25

One-year adjustable...8.125......2.00..........8.25......1.75

*A point is a one-time fee equaling 1 percent of the mortgage.

Source: Chicago Title Insurance Co.