Fannie Mae is planning to offer homebuyers new ways to reduce their mortgage insurance costs.

Chairman Franklin D. Raines said on Thursday that Fannie would reduce the insurance required on high-loan-to-value loans processed by its automated underwriting program.

The initiative is "just the beginning" of the mortgage insurance options Fannie Mae plans to provide, Mr. Raines told senior executives at a New York conference sponsored by the Mortgage Bankers Association.

Fannie's plans for the mortgage insurance initiative include reducing insurance costs, offering consumers new options to pay for credit risk, and expanding its Flexible 97 low-down-payment mortgage, Mr. Raines said.

"Our goal is to offer lenders the opportunity to offer to consumers lower monthly payments and more home per mortgage dollar, and qualify more people for mortgages," Mr. Raines said in his first speech since becoming chairman and CEO.

"All of which means lenders can serve consumers better."

Mr. Raines said the new options would result in "more efficient risk sharing." Risk sharing protects Fannie, the borrower, the lender, and the mortgage insurance companies, he added.

Though Mr. Raines said that Fannie hopes to work with lenders and the mortgage insurance industry to make these options possible, his announcement left some insurers concerned about the future of their business.

Christopher S. Nard, a marketing group manager for Republic Mortgage Insurance Co., Winston-Salem, N.C., said he was "unclear about the impact on our relationship with our traditional customers, who are mortgage bankers. It's probably not going to be positive."

What is at stake is the future of the risk sharing that mortgage insurance companies have with mortgage bankers, one source said.

And the proposal would cut into the potential earnings of mortgage insurance companies, one mortgage banker said.

Fannie Mae's and Freddie Mac's role in the mortgage industry is multifaceted, Mr. Nard said. Both Fannie and Freddie act as regulator, customer, competitor, and partner to the mortgage insurance industry, he said.

Fannie's announcement comes at a time when analysts have voiced concerns about rising political and interest rate risk and how government-sponsored enterprises maintain their relationships with lenders and the mortgage insurance industry.

The balance shifted with Freddie's attempt at changing its charter to allow it to sell mortgage insurance, which was interpreted as an effort to "preempt the mortgage insurer's livelihood," one source said.

Mr. Raines said that partnership in the industry helped to defeat the proposed "tax on homebuyers"-actually a tax on Fannie and Freddie-that surfaced just before Jan. 1.

Had the plan gone into effect, 60,000 families would not have become homeowners, he said, adding that "homeownership taxes and penalties certainly will come into play again this year."

Mr. Raines also attempted to ease fears that Fannie might originate mortgages.

"We don't want to be your competitor," he said. Fannie Mae "will not originate mortgages," he continued, jokingly offering to tattoo this declaration on his forehead.

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