WASHINGTON -- The chairman and vice chairman of Fannie Mae last week took their strongest stab yet at assuaging lender concerns about the agency's ambitious technology initiatives.
In a closed meeting of the company's advisory council, Chairman James Johnson and Vice Chairman Frank Raines laid out the principles that they said were guiding the company's initiatives, according to a source close to the council.
"They were making a genuine attempt to be more precise and not waffle" on lender concerns, the source said.
Mr. Johnson and Mr. Raines told the audience of lenders, realty agents, and community activists that they were determined to work with their customers, not around them, the source said.
The Federal National Mortgage Association's attempts to develop an industrywide system that links lenders, appraisers, underwriters, and Fannie Mae to each other have raised fears among lenders that Fannie is trying to elbow them out of the mortgage market.
This statement "clearly addressed [the] concern about vertical integration [that would] eliminate the need for mortgage bankers and servicers," the source said.
Cost Concerns Addressed
Mr. Raines and Mr. johnson also said they wanted the technology to be cost-effective and widely accessible.
Those statements were intended to assuage the fears of small lenders, who worry that they will be locked out of the industry if Fannie's technology is too expensive, the source said.
"That's our goal - to make sure that everyone in the industry understands the benefit to them and consumers of what we're trying to do," said David Jeffers, a spokesman for Fannie Mae.
Large Companies Worried
The officials also said Fannie Mae is looking at how its system can "talk" to systems used by different lenders, according to another source who attended the meeting.
But large companies are still concerned about that issue, the first source said.
Angelo Mozilo of Countrywide Credit Industries Inc., has in the past expressed concern that his company's own technology investment will be devalued by Fannie Mae's programs, if Fannie gives better terms to lenders who use the system it designs.
Another hot issue discussed at the meeting was "to what extent Fannie Mae should be developing technology that other private companies are capable of addressing," according to another source close to the council.
Florida-based Computer Power Inc., for example, is expected to unveil broad new technologies for the mortgage industry.