SAN FRANCISCO -- Listening to the chairmen of Fannie Mac and Freddie Mac speak Wednesday at the Western Secondary Mortgage Market Conference, it would have been hard to tell that the mortgage industry is in the throes of a crisis.

The two executives made barely a reference to the tumult in the industry, focusing instead on the longer term. And they said the outlook was bright.

"These are changing times," said James Johnson, chairman of the Federal National Mortgage Association, "but underlying all of that my most important message to you today is that in 1994 we see a lot of reason to believe that we can be optimistic about what the overall mortgage finance system will be able to do."

Mr. Johnson said he expects long-term interest rates and mortgage rates to fall by year-end, and mortgages for home purchases to reach a record level of $540 billion.

Homeownership will receive a big boost for the rest of the decade, as 20 million Americans enter their peak homebuying years - between the ages of 35 and 60 - Mr. Johnson said. The industry will also benefit as the population grows by 27 million this decade, he said.

Mr. Johnson touched only briefly on the strong shift to adjustable-rate mortgages, which has left traditional customers of Fannie and Freddie scrambling to make loans and sell them to thrills, rather than the agencies.

He said that Fannie has rolled out new adjustable-rate products and is working with its customers "back and forth" on what they and others in the system are selling.

Leland Brendsel, chairman of the Federal Home Loan Mortgage Corp., used the forum to promote his agency's automated underwriting system.

Freddie Mac appears to be slightly ahead of Fannie Mac in developing this technology, and lately Mr. Brendsel has taken to using every major industry meeting to press this advantage.

Even as mortgage bankers are struggling with cutthroat pricing and falling market share, Freddie Mac is making a strategic commitment to technology, Mr. Brendsel said.

Early reviews of the underwriting system have shown that lenders can reduce the time it takes to underwrite a loan to as little as five minutes, he said.

Later on Wednesday, Freddie Mac announced that it will also roll out an electronic network linking lenders to the agency as well as mortgage insurers and credit bureaus. The network is expected to be up and running next year, and Freddie Mac officials said Fannie Mae will be invited to link up as well.

Separately, Aida Alvarez, director of the Office of Federal Housing Enterprise Oversight, caused quite a stir by warning that some investors may be unwittingly investing in certain forms of structured debt securities that Fannie and Freddie sell in the capital markets.

"I am concerned that some investors, including thrifts and commercial banks, may be seduced by the agency status of GSE issuers into investing in these complex debt instruments without a proper appreciation of the underlying risk," she said.

While the securities do not carry much credit risk, they do carry market risk that buyers may not understand, she said.

Speaking to reporters later, Ms. Alvarez said she has been in touch with bank and thrift regulators, who are also worried about the situation.

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