Residents of Cambridge's richer neighborhoods are more likely to be pursued by mortgage lenders than residents of the city's poorer neighborhoods, and some say it's just not fair.

Fair lending advocates and some community leaders argue that banks have a responsibility to aggressively seek out and encourage creditworthy borrowers from all corners of Cambridge--without excluding the areas most in need of investment. They say that area banks may be engaging in a subtle form of discrimination.

The lenders say they are fair, and they explain the disparity in lending by saying they get fewer loan applications from residents of the city's poorest neighborhoods.

The Cambridge-based banks--Cambridge Trust Company, Cambridgeport Mortgage, East Cambridge Savings Bank and Cambridge Savings Bank--make fewer loans to low income areas than to other areas in the city, a Crimson analysis of federal statistics found.

The Association of Community Organizations for Reform Now (ACORN), which investigates lenders to ensure that they provide capital to low income areas, says banks may practice a form of "pre-screening" by failing to pursue loans in certain neighborhoods.

According to ACORN, this is a violation of the Community Reinvestment Act of 1988, which was intended to eliminate bias in lending.

Deepak Bhargava, ACORN legislative director, says such "prescreening" discourages applicants from initiating a mortgage application process.

While regulators keep a close watch on fairness once borrowers actually complete a loan application, Bhargava says institutions often discriminate in more subtle ways--by not marketing their mortgages in certain areas. The practice, claims Bhargava, is a violation of the spirit if not the letter of the law.

"The extent to which institutions aggressively seek applicants is difficult to monitor," Bhargava says. "[Banks] are supposed to be seeking out credit worthy applicants from low income areas. That is the law."

Local lenders all say they pursue loans in all areas of the city. But the numbers tell something of a different story.

Cambridge Savings Bank, headquartered in Harvard Square, was the city's third-largest lender in 1992, according to statistics published by the Federal Deposit Insurance Corporation (FDIC).

The bank received 164 mortgage loan applications in Cambridge in 1992, and completed 149 of these loans, according to copies of data the banks must report to the FDIC.

Only one of these loans went to census tract 3531, the East Cambridge area which had the city's lowest per capita income ($9,923) in the 1989 census.

The bank also received one application (which it approved) from tract 3525, and no applications from tract 3524, an East Cambridge neighborhood that had the third lowest per capita income in 1989.

Cambridge is divided by the Census Bureau into 30 tracts, which the city has grouped into 13 "areas." The top tracts have a per capita income of about $42,000. Many of the banks lend heavily to the city's wealthiest neighborhoods.