A small consulting firm has snared Fannie Mae's support for a software system that takes loans from origination to securitization.

Mortgage Dynamics, a five-employee operation in McLean, Va., devised the system over the past two years and is now readying it for a large-scale rollout.

The product, with a price range from $20,000 to $100,000 depending on use, is designed to improve mortgage banks' profit margins by keeping close tabs on interest rates, loan fallout, and prices that agencies are paying for products.

To get the word out, Mortgage Dynamics will receive a major boost from Fannie Mae, whose representatives have vowed to talk up the system.

"Fannie will serve as a real conduit for getting this system in front of people in the industry," said David Brashear, Fannie's vice president of technology products.

Fannie will tout the product, dubbed the Smart system, at industry conferences and will also talk it up to users of Fannie's own Mornetplus network.

The system, targeting mortgage banks doing $100 million or more in annual volume, also is compatible with securitizations by Freddie Mac, Ginnie Mae, and other conduits.

The broad reach does not put off Fannie, which last year securitized $189 billion of mortgage loans affecting 2.3 million families.

"We've got to be realistic in our approach," Mr. Brashear said. If confined exclusively to Fannie applications, the product "would have very little use," he said.

Mr. Brashear said Fannie has no financial interest in seeing the product succeed. Instead, he said he supports the Smart system for its ability to facilitate hook-ups between Fannie and mortgage lenders.

The Smart system is designed to allow mortgage bankers to efficiently oversee loans in-house - using risk, pipeline, and delivery management - as the loans make their way from origination to closing to ultimate sale.

The system also lets mortgage bankers reduce processing costs by tracking market conditions that affect prices of their loans, said Dan Measell, a Mortgage Dynamics analyst who helped develop the product.

Mr. Measell said he believes Mortgage Dynamics is the first to develop a soup-to-nuts system of this type, and industry observers tend to agree.

"I don't know of another system that can track loans through," said Arthur Axelson, law partner specializing in the mortgage industry at the Washington firm of Pepper, Hamilton & Scheetz.

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