SAN FRANCISCO — If mortgage technology companies are having jitters after a year that brought the demise of several online originators and a shakeout in other tech sectors, they did not show it at the Mortgage Bankers Association’s annual technology conference here last week.

Though attendance dipped slightly — perhaps because of tightening budgets as companies trim costs — the tone was upbeat. Most participants strode confidently through the halls looking for new deals.

Moreover, the number of exhibitors was up 17%, indicating that tech companies believe there is still opportunity for significant profits in the mortgage industry.

Doug Duncan, chief economist at the MBA, said that though the industry has gone through some tough times, chances remain good that emerging companies can find their niche and profit by making the mortgage process more efficient.

Contrary to popular belief, he added, venture capital for mortgage-related technology ideas has not evaporated.

“Certainly the risk appetite for the venture capital folks has changed,” Mr. Duncan said. “They are paying more attention to real returns earlier in the cycle … but I don’t think it has dried up. It’s just more conservative than it was.”

Freddie Mac has financed several technology deals in the past month. It has invested, through a $2.5 million line of credit, in the online loan supermarket LendingTree Inc. of Charlotte, N.C.; signed an alliance with Frederick, Md.-based Ultraprise Corp., which runs a loan trading site; and agreed to purchase a technology unit of Tuttle Decision Systems from Microsoft.

LendingTree, which has lost almost $80 million since going public in February 2000, still managed to raise an additional $45 million in February.

The company’s founder and chief executive, Douglas Lebda, spoke at a conference roundtable discussion about the next group of winners and losers. He said that even though there have been disappointments in online mortgage lending, the sector is roughly on track to achieve the ambitious goal of 10% of market share in 2003.

Sal Miosi, senior vice president of business operations for Milwaukee-based eMagic, a unit of Mortgage Guaranty Insurance Corp., added that one positive development of the dot-com debacle is that because many firms promised too much and underperformed, those that met their goals have gained the confidence and loyalty of their customers.

Richard Beidl, director of global mortgage lending at the TowerGroup research firm in Needham, Mass., said newer companies with good technology are paying for the flawed business models of companies that gobbled up capital a year or two ago.

Opportunities remain, he said, but companies with quality products but no financial staying power will probably be acquired. Fifteen percent to 20% of new technology companies will survive on their own or be purchased, he said; the rest will fail.

The bright spots on the horizon appear to be outweighing the dark, however.

The refinance boom, going into its fourth month, bodes well for mortgage companies of all kinds and creates the environment in which online originators should flourish, analysts say.

In addition, the Mortgage Industry Standard Maintenance Organization — the MBA-led industrywide coalition to develop universal data exchange standards — is working energetically. The fruits of that effort are expected to create great efficiencies for the market.

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