CHICAGO -- Tighter lending regulations and economic uncertainty may mean tougher times ahead for home buyers, mortgage lending officials said here this week.

Members of the Mortgage Bankers Association of America, meeting at their annual convention, said they already have seen a decline in lending activity since Iraq invaded Kuwait Aug. 2. Introductory, or discount mortgage "teaser rates," have largely disappeared and some types of mortgages are harder to obtain, particularly those that don't require extensive credit documentation.

The organization, which represents almost 2,600 mortgage lenders who make about one-quarter of all residential loans, has been buffeted in recent years by large-scale changes in the way mortgage loans are handled in the United States and by the slumping real estate market.

This year appears to be no different: The industry has been hit by fallout from the savings and loan crisis, hurt by world events that have frightened home buyers out the market and the association has been shaken by internal strife that led its largest dues-paying member to quit the group last month. The industry also has to swallow a federal housing bill containing provisions it dislikes.

"It's just been one shock after another," said Warren Lasko, executive vice president of the association.

The real estate market in much of the country, after recovering slightly in early summer from what Lasko called the "recession" of late 1988 and early 1989, resumed its decline after the Iraqi invasion of Kuwait. "That one action has really thrown a wet blanket over the housing market," he said.

Since mid-August, mortgage-lending activity has declined, according to a national survey of lenders released at the convention. More than half of the 40 lenders surveyed reported they processed fewer loans and for smaller dollar volume this September compared with last September.

The association's president, James Nelson, said the dollar volume of mortgage loans is expected to fall 10 percent, to about $355 billion this year from $388 billion in 1989, as concern over the economy and the threat of war in the Persian Gulf cause prospective home buyers to pull back.

"Once Kuwait was invaded, people decided they weren't interested in buying housing," said Herbert Tasker, president of All Pacific Mortgage Co. in Concord, Calif.

Lenders have responded to the slowdown by offering such incentives as lower initial rates, 24-hour loan approvals and the option of allowing sellers to pay six months worth of their buyers' mortgage payments.

On the interest-rate front, the association's chief economist, Lyle E. Gramley, predicted that mortgage rates will drop slightly in the spring if the price of oil retreats and no shooting war occurs in the Persian Gulf.

If war does break out, Gramley said, "Who knows?"

The slowing economy has spurred the Washington-based Federal National Mortgage Association (Fannie Mae), which buys mortgages and packages them for sale to investors, to tighten its requirements for so-called "no-documentation" or "low-documentation" loans, making them more difficult to obtain, said Fannie Mae Chairman David Maxwell.

Fannie Mae's regulations are significant because the congressionally chartered company is the country's largest investor in home mortgages. "No-documentation" loans are available to some loan applicants willing to make larger down payments.

In return, processing of the loan is accelerated because fewer supporting documents are required.

"We feel that while it's desirable to process a loan as quickly as possible, it shouldn't be done at the expense of the soundness of the loan," Maxwell said.

Industry officials say they have not seen an increase in mortgage default rates in the first six months of the year as a result of economic troubles in some parts of the country.

However, Leland Brendsel, chief executive of the Washington-based Federal Home Loan Mortgage Corp. (Freddie Mac), another secondary mortgage market firm, warned that his company expects to see some increase in defaults during the second half of 1990, although not to troublesome levels.

The demise of many S&Ls has had an effect on some home buyers, although the impact is nowhere near as great as on real estate developers, who have complained of a severe credit crunch caused by the S&L rescue.

In the residential lending market, by contrast, "there's a steady flow of funds to meet demand," Maxwell said.

But buyers probably won't see any more extremely low teaser rates on adjustable-rate mortgages and other such come-ons that some weak S&Ls offered to attract borrowers.

Some New England S&Ls used to offer rates as low as 5.75 percent in the first year of an adjustable-rate mortgage.

"It was insane, some of the things they were doing," Brendsel said.

The mortgage bankers group is in its third year of a retrenchment that has cut its membership and changed its makeup. Since last year, membership has fallen by 228 members to 2,593.

Most recently, Citicorp, the Mortgage Bankers Association's largest member, dropped out of the group after the association opposed the payment of referral fees to realty agents.

Citicorp runs a mortgage program that allows real estate agents to charge fees to borrowers in return for finding them a mortgage lender.

In a speech to association members, Nelson appealed for harmony. "We need to accept the fact that we won't always have unanimity on issues or agreement on perspectives," he told the group.

The association was defeated in several of its attempts to influence the federal housing bill.

One provision of the legislation will make obtaining an mortgage insured by the Federal Housing Administration (FHA) more expensive to borrowers and charge higher fees to home buyers deemed more likely to default on FHA loans.

Lasko said the plan has "fundamental flaws," and that it would make the program attractive only to borrowers more likely to default on their mortgages.

Despite the upheaval, some participants at the association's convention were philosophical about the state of the market.

"I think it's unsettled every year," said Richard Moore, president of Commerce Mortgage Corp., in Kansas City, Mo.

Lasko said that the people still left in the association are survivors of years of turmoil and sour real estate markets in various parts of the nation.

"They've gotten through some pretty rough years and they think they can do it again," he said.