Fannie Mae has fended off a threat by Freddie Mac to make a dent in Fannie's majority share of the secondary mortgage market.

Countrywide Credit Industries, the nation's largest independent mortgage lender, announced Friday that it had agreed to sell most of its loans to Fannie. In return, Fannie will let Countrywide use its own electronic system to underwrite loans, will help promote other Countrywide products, and will confer certain other advantages on Countrywide.

Freddie Mac had gotten a jump on Fannie Mae by forging near-exclusive deals with Wells Fargo's Norwest Mortgage unit, the largest mortgage lender, and with Bank of America, No. 4 last year. Fannie had partially countered by cutting similar deals with Fleet Mortgage, No. 6, and some other smaller lenders. The arrangement with Countrywide, No. 2, goes a long way toward restoring parity between the two.

Last year Countrywide, based in Calabasas, Calif., originated $88.5 billion of loans and may approach that figure again this year, so even a small shift in the percentage of loans sold to Fannie means big numbers. A spokesman said sales to Fannie would exceed historical levels of 55% to 65% of production.

But a Countrywide spokesman said Freddie "will continue to be a very important partner for Countrywide. This is not the end of our relationship by any means."

Chase Manhattan's mortgage unit, No. 3 last year, is also believed to be negotiating with Fannie. A spokeswoman for the bank declined to comment.

Thus, the deals have shifted the balance of power in the industry, giving lenders leverage as competition for market share between Fannie and Freddie intensifies.

Nobody would say outright whether lenders are getting reductions in their guarantee fees as part of the deals, but most observers, and investors, assumed so on the theory that the higher volumes would give the lenders more bargaining power.

Asked if his company's deal with Fannie involved reduced fees, a Countrywide spokesman responded, "That was one of the issues addressed in the agreement."

Lenders have traditionally allocated their loan sales between the two government-sponsored enterprises based on prices and other considerations after the loans were originated.

Controversies over technology and other issues precipitated this year's rash of exclusive or near-exclusive agreements between big lenders and the secondary marketing behemoths. Mortgage bankers complained that Fannie and Freddie were trying to force them to use the government-sponsored entities' automated underwriting systems after the lenders had invested millions of dollars in their own systems.

In return for guaranteed chunks of lenders' production, Fannie and Freddie have agreed to accept loans vetted by the lenders' proprietary systems. Freddie started the trend by pairing up with Norwest in March. Analysts said that forced Fannie to follow suit to protect its roughly 55% share of the secondary market.

But Countrywide executives contended that unlike the other deals, this one is about much more than just technology or market share.

Angelo R. Mozilo, Countrywide's chairman, said the arrangement would allow for "unequaled advances in productivity, efficiency, and innovation."

Indeed, the "strategic agreement" includes new twists not seen in previous deals between lenders and government-sponsored enterprises:

For about 25% to 35% of Countrywide's loans, Fannie will, in effect, pay the servicing fee up front. Usually, lenders get a fee over the life of the loan for collecting and processing payments and remitting them to investors.

The "alternative servicing compensation" scheme gives Countrywide cash up front, so it does not have to hold mortgage servicing rights-a risky and volatile asset-on its balance sheet.

That reduces the amount of capital the company has to hold against its servicing portfolio, allowing it to invest that money elsewhere.

Countrywide and Fannie are exploring ways they can expedite the process of pooling loans for securitization, a spokesman said. That would reduce the amount of time Countrywide has to hold the loans on its books, bringing further capital relief, he said.

In addition to accepting loans approved by the lender's automated underwriting system, Fannie will waive certain requirements for some loans originated by Countrywide. For example, if a Countrywide customer sells a house and moves, Fannie might accept less documentation for a new loan through Countrywide.

Fannie will help Countrywide market the services of its subsidiaries. For example, Countrywide's LandSafe Inc. unit will be able to market title insurance, property appraisals, and other ancillary services through MornetPlus, Fannie's private communications network.

Fannie added Countrywide's securities brokerage unit to the exclusive club of 50 dealers that underwrite Fannie's medium-term notes.

The two companies are contemplating synergies between Fannie and Balboa Insurance, which Countrywide purchased last month.

Most observers were impressed.

Countrywide's arrangement with Fannie "really unleashes some opportunities for innovation between the primary-market lender and the secondary-market owner of the loan that I don't think existed before," said Jonathan Adams, an analyst at Prudential Securities.

Loans that were not previously considered eligible for purchase by Fannie may now be eligible, Mr. Adams said.

However, some competitors of Countrywide, speaking on condition of anonymity, were more cynical.

"It speaks more about Angelo Mozilo and Jim Johnson than anything else," said the chief executive of a top-25 servicer, referring to Mr. Mozilo's close friendship with the former chairman of Fannie Mae.

He also noted that Countrywide has had a rocky relationship with Freddie Mac. This dates to 1995, when Countrywide complained publicly about Freddie's insistence that the lender buy back some loans it had sold to the secondary marketer.

Officials at Fannie Mae and Freddie Mac declined to comment on Fannie's deal with Countrywide.

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