Robert J. Levin, a top Fannie Mae executive, began his speech to thrift executives at the Western League's secondary market conference with a look at the past.

Mr. Levin, who as executive vice president of marketing is Fannie Mae's supersalesman, recalled the credit crunch in the mid-1970s, when thrifts still ruled the mortgage business.

He cited a 22-year-old article in the San Francisco Examiner that described the home loan shortage this way: "If you can get your hands on money for a mortgage on a new house, you're lucky."

Today, Fannie Mae and its counterpart, Freddie Mac, rule the mortgage business, and Mr. Levin was quick to note there is no dearth of mortgage money.

But thrift executives, besieged by competitive and regulatory pressures, must have wondered whether the irony was intended when Mr. Levin said, "At Fannie Mae, we are convinced the best is yet to come. The question is, how fast will it get here?"

Here in the heart of thrift country, at an annual conference that is just shy of its 25th birthday, Fannie Mae and Freddie Mac officers turned in confident performances.

After all, as Mr. Levin said, "Why be shy about it? We're absolutely determined to be the best people to work with so that when you think of top customer service, you think of Fannie Mae."

Both agencies used the forum to announce incremental changes to their underwriting technology. Freddie Mac's president, David W. Glenn, said it had begun a test project to apply its automated underwriting capability to applications for government-insured FHA loans.

Mr. Glenn compared the FHA underwriting pilot to such momentous industry breakthroughs as the creation of the mortgage-backed security, noting its potential to cut costs on low-balance loans.

Moreover, if Freddie's experience of running subprime loans through its underwriting system is any guide, the agency should be able to identify borrowers who qualify for lower-rate conventional loans but who are now routinely directed to the FHA program, Mr. Glenn indicated to reporters.

Meanwhile, Fannie Mae reported that it now offers a streamlined appraisal option that can trim costs by as much as 40%.

In addition, Fannie Mae announced that the Mortgage Guaranty Insurance Corp., Milwaukee, would offer Fannie Mae's underwriting system to lenders who contract their underwriting to MGIC.

Fannie Mae also announced it had created the first security that pays investors the servicing fee normally retained by lenders.

The security, marked by a special prefix, is made up of loans originated by Standard Federal Bank, Troy, Mich. The agency will hold the security in its own portfolio in a bid to gradually create a market.

Mr. Glenn said Freddie Mac would create a similar security next month. Investors have been wary of this new arrangement because they fear these securities will prepay more quickly than securities where lenders retain the servicing interest. Fannie Mae and Freddie Mac hope to show lenders that's not so.

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