What does technology mean for our industry? It means a whole new world for lenders, homebuyers, and the secondary market. After all, information is the essence of mortgage finance.

Think about it. Every step in the mortgage value chain is based on information, from the initial listing of a home for sale to the reporting on the loan to the investor.

Yet despite the fact that information is the fuel that powers the engine of mortgage finance, our industry has lagged behind in using information technology to do our business better.

That's all about to change. We now have new technologies that make the exchange of information among faster, easier, more accurate, and more efficient than ever for lenders, helping them take full advantage of the market opportunities technology creates.

The reason is clear. Our ability to carry out our housing mission depends on our partnership with mortgage bankers. Lenders have direct contact with consumers and serve their needs. They are at the heart of the mortgage finance system, and that's the way we want it to stay.

Our long-standing and unchanging reliance on mortgage bankers as indispensable partners, customers, allies, and friends enhances our ability to maximize the benefits that information technology brings to our industry.

The investments we have made in technology build on the firm foundation of our partnership with lenders. Our new technologies respond to different industry needs. But they all share six critical characteristics.

First, they are customer driven. Tools like Desktop Originator and Desktop Underwriter were developed after intense, ongoing consultation and testing with mortgage bankers. They are designed to give lenders what they need to do business faster, better, and more profitably.

We worked with a wide array of industry participants. We conducted focus groups with lenders to make sure we would be giving them what they needed to do good business.

We then tested our technologies with lenders in 1994, and we refined the systems to respond to the "real life" situations these lenders faced when using them. Desktop Originator, Desktop Underwriter, MornetPlus, and all our technologies are tools designed to make lenders' jobs easier.

Second, our technologies are broadly based. They are the only ones that make it possible to originate and approve any conventional home loan in just over an hour after first contact with the consumer.

Lenders can use our system to originate all varieties of loans, whether they intend to sell them to Fannie Mae or not. If a loan isn't recommended for approval right away, our system gives a reason why, so lenders can go back and address those factors without having to start all over again from scratch.

Third, they are open. We don't think we have a monopoly on good ideas. That's why our system is designed to work well with the technologies lenders already use, as well as ones that they may add in the future. We know there will be some other applications that will work well in certain circumstances, and our philosophy is, let them in.

We are making it possible for other technologies to link into our network so that our customers can take advantage of what they offer.

In fact, we recently announced that four mortgage insurance companies have linked their application software to our system, and 12 providers of computer mortgage software have joined us as partners by creating interface links to our Desktop system.

We invited other software vendors, including Freddie Mac, to link their applications to Fannie Mae's Desktop Originator/Desktop Underwriter system. We hope they take us up on our offer.

Fourth, they are flexible. For example, Desktop Originator and Desktop Underwriter can be used as building blocks to improve each stage of the lending process.

They also can be used together as a comprehensive system, bringing even greater value. Taken together, our systems are in the vanguard of global information technology. We will continually improve them, so lenders can benefit from the latest advances without having to scrap what they already have in place.

We are committed to providing technical assistance and support to ensure that lenders can make the most productive use of our systems and get the maximum benefit from them. And we are equally committed to making sure that our systems are used responsibly by everyone who has access to them.

Fifth, they are efficient. Desktop Originator and Desktop Underwriter make it possible to originate more loans in less time. Desktop Underwriter provides underwriting decisions for 100% of all conventional loans in as little as four minutes.

They make it possible to take a loan from application to closing in a matter of days. They eliminate the need for paper. They enhance consistency and reduce risks.

Finally, they will help lenders be more profitable. We've used technology to reduce our costs and expand our ability to serve new markets and provide new services, and in so doing we are making a very positive impact on our bottom line.

Our technologies can do the same for mortgage bankers who use them. Desktop Originator lowers costs by reducing staff, fax, and paperwork expenses. Desktop Underwriter can save 45% of the cost of underwriting a loan.

Together, they will save lenders an average of $300 per loan, and over time, with the enhancements we will provide, will reduce the cost of originating a mortgage by $1,000 per loan. That's the equivalent of a $1 billion down payment assistance program.

Fannie Mae's information technologies are all designed with one goal in mind - to help lenders succeed in bringing homeownership opportunities to families who are economically qualified to buy a home.

We see mortgage lenders as our firm foundation, and the success of our mission depends on the success of theirs.

We are inextricably linked, and that's good - for Fannie Mae, for mortgage bankers, and for the American people who hold the dream of homeownership dear. Mr. Johnson is chairman and chief executive of the Federal National Mortgage Association. This article is adapted from a recent speech at a conference of the Mortgage Bankers Association of America.

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