The Federal National Mortgage Association is tapping the Internet to extend its automated underwriting system to a larger universe of mortgage brokers.

Working with First Mortgage Network, Plantation, Fla., the government- sponsored entity known as Fannie Mae will recreate its highly successful Desktop Underwriter program on the Internet. The two will roll out a pilot of the program in January.

Six lenders have agreed to become participants in the Web site, pending approvals from their legal departments. Only GMAC Mortgage Corp., Horsham, Pa., has publicly announced its involvement.

Under current procedures, wholesale lenders give brokers access to Fannie Mae's Desktop Underwriter and fund the approved loans. Brokers covet these automated approvals, which require fewer documents and result in lower costs.

"This opens the Desktop Underwriter system to a larger audience," said William E. Kelvie, chief information officer at Fannie Mae. "We need to get to a quick launch and get some acceptance."

In the past year, the volume of loan applications going through Desktop Underwriter has increased more than 700%, to more than 30,000 submissions a day, Mr. Kelvie said. About 750 lenders use the system, which has been commercially available since 1995. The system approves 75% of loan submissions.

First Mortgage is a wholesale lender with heavy involvement in a number of technology ventures. It sells software to the real estate industry, for example, and soon will process loan applications submitted through Intuit Inc.'s Web site.

"We are a purveyor of information," said Seth Werner, president and chief executive officer of First Mortgage Network.

Mortgage brokers will "transport information to other seller-servicers who have signed up to be on our site," he said.

Scott Cooley, president of Contour Software, a Campbell, Calif., unit of First American Financial Corp., said that by gaining access to automated underwriting via the Internet, "brokers will no longer need the wholesaler."

Mr. Cooley said brokers can complete a loan package and essentially sell it to the wholesaler with the best pricing. "That's scary for wholesalers who do not perceive their pricing as very competitive," he said. will let Fannie Mae extend Desktop Underwriter more directly to mortgage brokers, Mr. Cooley said. In the past, Fannie has avoided doing business directly with brokers. Such contacts would put it in conflict with its lender customers, who consider brokers to be their primary customers, he said.

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