PHOENIX - The secondary market conference held here last week for thrift executives has come a long way since it began 40 years ago.

It used to be that bankers pinned on 'B' badges to identify themselves as buyers of loans, or 'S' badges as sellers, and the business of the meeting was to do deals.

Now, with thrifts selling increasingly to the huge secondary market agencies, the meeting is dominated by the Federal National Mortgage Association and Federal Home Loan Mortgage Corp., or Fannie Mae and Freddie Mac, as they are called.

The agencies sponsor receptions, golf tournaments, and tennis. And the hot items on the agencies' agendas, such as their new technology to make and underwrite loans, loom large.

As the thrift industry has grown smaller, so has the meeting. This year, 475 attended. In the industry's heyday, the conference attracted more than 2,000 executives.

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Top executives from both secondary market agencies focused on technology in their speeches to the group. Both Fannie and Freddie are building automated underwriting systems. Fannie Mae is also developing an automated loan originator.

Larry Small, president of Fannie Mae, said he believes the key to leveraging technology in the marketplace is good management by lenders.

Leland Brendsel, chairman of Freddie Mac, said Freddie is rethinking underwriting rules as it automates the process.

He told reporters later that the newest version of Freddie Mac's system is being tested by one lender and will be widely available by yearend.

Executives from each agency also discussed their technology initiatives at closed meetings with members of the trade group.

According to those at the meetings, some thrift executives are nervous about whether they can afford the technology when loan volumes are falling. But without the cost-cutting technology, they worry they will be at a stiff disadvantage.

Like mortgage bankers, thrift executives are also worried that the automated underwriting technology may squeeze their role, and their profits, out of the process. They worry that real estate agencies, which have first contact with borrowers, will play a larger role.

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Competitive issues between agencies and thrifts, which continue to maintain sizable loan portfolios, flared up at the opening session.

Jim Montgomery, chairman of Great Western Bank, the nation's second- largest thrift, took Mr. Small of Fannie Mae and Mr. Brendsel of Freddie Mac to task on their agencies' loan limits.

The limits are pegged to a housing price index maintained by the Federal Housing Finance Board.

Despite declines in the index last year and the year before, the agencies have refused to reduce their loan limits. Thrifts have complained to agency regulators that this is, in effect, a grab for market share. But the law allows the agencies to maintain their limits if the index falls.

Now, thrifts are lobbying to make sure that, the next time the index rises, Fannie and Freddie adjust their loan limits for the two declines before raising the limits again.

Mr. Montgomery, who happens to sit on Freddie Mac's board, added his voice to this demand in his speech.

Reporters asked Mr. Brendsel later what his agency's position is on the issue.

With Mr. Montgomery only a couple of feet away, Mr. Brendsel declined to answer directly. "We've made no plans as to what we will do when, and if, that occurs," he said. But he added that the issue should be re-examined.

He asked whether the agencies should have any loan limits at all, with the secondary market agencies having grown so much.

Mr. Montgomery spoke up: "My view as a portfolio lender is that people with 'Federal' as the first name ought to be tending to handle that part of the market that is the low end (where) the need is greatest."

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