United Software Systems Co. and Fannie Mae are teaming up to enable users of Fannie's underwriting system to receive appraisals electronically.

The connection, which will be available to all lenders using Fannie Mae's desktop underwriter, is to start in May. It would be free to lenders but not to appraisers, who would have to pay United for the software.

United has 15,000 appraisers on its network.

"Appraisal reports choke closings most often because they get ordered last and are the most expensive," said Michael Schafer, president of Phoenix-based United Systems, at last week's Mortgage Bankers Association technology conference in Chicago. "Most people do not want to drop $300 to $350 on one (appraisal) unless it's a sure deal."

The system will cut the turnaround time for appraisals, now five to 10 days, in half, he said.

United's deal is not exclusive, Mr. Schafer said, and Fannie is looking for other vendors to come on board.

Mr. Schafer said he expects the partnership to double use of his appraisal software. But "lenders have to be adamant about using technology," he said, "because appraisers will tend to be status-quo."

Lenders will be free at first not to use the service, Mr. Schafer said, but "ultimately I think Fannie will require automated appraisals." Fannie wants to turn loans around faster, he said, and appraisal is "an important piece of that process."

Jeffrey R. Hayward, Fannie's vice president of servicer relations, said prior to the announcement that it is determined to make changes in its suite of servicing products.

"We feel that now is the time," he said.

For example, Fannie is pushing to make Internet connections linking servicers, mortgage insurance companies, and attorneys, Mr. Hayward said.

It would also like to introduce on-line tools for loss mitigation with servicer-based applications, he said. "Each servicer is different, as is each case, so this function would have to be customized."

Mr. Hayward also said he would like to see credit scores used to identify potential bankruptcies and isolate them from the remainder of the application pool.

And Fannie would like to encourage Web-based functions such as servicing transfers and preparation of monthly reports, Mr. Hayward said. It would also like to start using teleconferencing to deliver servicing training, he said.

Fannie is hoping to distribute policy changes over the Web and by electronic mail, instead of mailing paper copies, Mr. Hayward said.

"In the past we have found problems," he noted. For example, "the manager of a department may have received the hard copy of changes, but nobody else has seen it."

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