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Despite fears that soft real estate markets and closer regulatory scrutiny are creating a credit crunch for borrowers, a group of home lenders say there is no lack of funds for mortgage loans.

The Mortgage Bankers Association of America said a survey of members showed that 52 percent reported an increase in loan applications and a majority said they were approving as many loans as in the previous quarter.The association represents 2,600 institutions that make loans to home buyers and sell them in the secondary mortgage market.

In the survey, 37 percent of the mortgage bankers said loan applications had decreased and 11 percent indicated no change.

When asked whether they were turning down borrowers who would have qualified earlier, 54 percent said no. Those who answered yes said the applicants were turned down because they lacked strong financial characteristics or could not qualify because of higher interest rates.

Fifty-six lenders were contacted in recent weeks for the survey, and the figures were compared with those from the first quarter, the association said.

MBA President Ronnie Wynn said that while builders and developers may be experiencing tighter credit from commercial lenders, "there is not a credit crunch for finding money to get a permanent loan on your home."

Cynthia Latta, senior financial economist for DRI/McGraw Hill Inc., a Lexington, Mass., consulting firm, agreed that strong loan applicants are not suffering a shortage of credit.

"There is plenty of credit if you are ready to make a 20 percent down payment and have an assured, steady stream of income. If you can only put down 5 percent down payment, you are out of luck," she said.

Lenders do not want to make a loan for 95 percent of the price of a new home because of economic weakness in many areas. "It would not take much of a downturn for a buyer to walk away from a loan," she said.

Home lenders were burned in many states by regional economic slowdowns in the 1980s, Latta said. An abundance of credit encouraged developers to build beyond the needs of such areas as the Southwest and the Northeast, she said.

Nowhere is this more evident than in the case of the savings and loan industry, in which hundreds of institutions have failed and the government faces an enormous bill to protect consumers at federally insured thrifts.

Mortgage bankers are the third-largest group of home lenders in the United States after thrifts and commercial banks.

The survey showed that mortgage bankers were picking up business as savings-and-loan institutions retrenched, said Wynn, a Montgomery, Ala., mortgage banker.

Lyle Gramley, the association's chief economist, said the tight credit in real estate development was contributing to the economy's sluggishness but was unlikely to lead to a recession.

"I do not anticipate it (credit slowdown) turning into recession, but it will contribute to factors causing slow growth in the economy," Gramley, a former member of the Federal Reserve Board, told reporters.

But growth could pick up next year, rekindle inflation and cause interest rates to rise, Gramley warned.

"Rates have been coming down. If that continues, we have a shot at a pickup in home sales. But if growth next year is faster, inflation could heat up and rates could tick up," Gramley said.