Mortgage lenders and consumer groups have launched at frenzied round of lobbying over one of the major issues financial regulators face from the 2008 financial crisis -- the new legal definition of a "safe," desirable mortgage.

The new standard for a "qualified" mortgage will determine which customers banks approve for a home loan more easily at the lowest cost, and will establish future legal rights of  borrowers who may lose their homes to foreclosure.

For banks and other lenders, billions of dollars in loans and revenues are on the line; they warn stricter rules will limit mortgage lending, potentially by millions of loans, jeopardizing the fragile housing market.

"This is critical because these (standards) will set the terms of residential mortgages for at least the next generation," said Diane Thompson of the National Consumer Law Center. "There's a lot at stake."

The lobbying activity has intensified ahead of a decision on new "QM" regulations expected in June from the Consumer Financial Protection Bureau.