The U.S. Department of Housing and Urban Development said it would allow the use of Fannie Mae's and PMI Mortgage Insurance Co.'s automated underwriting systems for FHA loans.

HUD last year gave its blessing to Freddie Mac's Loan Prospector system as a tool to approve applications for loans to be insured by the FHA program. Now, lenders may also use PMI's Aura system, which Fannie Mae will distribute nationally as part of its Desktop Underwriter system.

Previously, Fannie and PMI offered their systems to FHA lenders as analytical tools, but they could not be used to confer final loan decisions, said Harvey Trimble, vice president for product development at Fannie.

Separately, Fannie said it would now charge lenders only one fee per loan for unlimited access to any automated underwriting software carried on its MornetPlus network. This would fulfill a pledge the company made last spring to allow lenders to use the system of their choice when reviewing loan applications.

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