American's Antoci struck a bargain with Fannie.

WASHINGTON - American Savings Bank's chairman, Mario Antoci, didn't think his company's $1.4 billion affordable-housing deal with Fannie Mae would go through.

Fannie officials had begun it on a dare. But when they saw what they were getting into, they balked, he recounted over the phone last week.

The deal is one of the largest affordable-housing transactions between a lender and Fannie Mae or Freddie Mac. American Savings swapped the loans for securities that it will hold initially but may sell later.

In public comment, Mr. Antoci and Bob Barnum, president. of American, urged Fannie officials to help them do more by buying loans made to low-income and moderate-income groups.

Stung, "Fannie Mae said, |We'll underwrite anything American does,'" Mr. Antoci said.

But when Fannie looked at the underwriting standards that American was using, it had a difficult time. "It looked like the deal was falling apart," he said.

Time passed. Fannie Mae saw that the adjustable-rate mortgages - still in American's portfolio - were performing well.

Fannie came back to the table, and the final deal was sweeter. It was larger and the guarantee fees Fannie charged for taking on American's risk were much lower.

For Fannie, the deal is important because the Department of Housing and Urban Development is pushing the company to boost its affording-housing lending.

A Pioneer

Mr. Antoci, 59, is a veteran of the thrift industry whose taunting obviously carried some weight with Fannie Mae.

He joined American in 1988 after serving as the second-ranked executive at H.F. Ahmanson & Co., the country's largest thrift. At Ahmanson, he helped pioneer adjustable-rate mortgages and is still considered one of the top authorities on the loans.

He jumped to American shortly after the once-troubled thrift was purchased from the government by the Robert M. Bass Group. Mr. Antoci has produced impressive results with the old-fashioned strategy of taking deposits and making home loans, mostly adjustables.

An Outlet for Loans

Mr. Antoci said the deal would help American push ahead with its central-city, lower-income, and minority lending.

"It turns out this is very good business," Mr. Antoci said.

"We are doing such a good job that we wanted to be able to distribute the risk. We needed to find an outlet for the loans."

Fannie Mae provided that outlet. Converting the loans to securities allowed American to cut the loss reserves it holds against them, Mr. Antoci said.

"We have the loan earnings on our portfolio, but for a fee, we have transferred the risk to Fannie Mae", he said.

"Fannie Mae is obviously a competitor. They don't help our cause. On the other hand, they allow us to continue our ambitions," he said.

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