At home on the Internet

Now that the names of the wunderkind dot-com financial services have faded off the Wall Street trading screens, look for success in a name with a well-worn, comfortable feel: Fannie Mae.

With b-to-b Internet transactions totaling US$800 billion last year, the company that is synonymous with increased home ownership can also say it is very much at home with e-business. "When we issue debt [using] a bond auction system, we do that over the Internet. When lenders are underwriting loans and then delivering them to us, we do all that business over the Internet. All of our interactions with multifamily lenders are over the Internet," says Federal National Mortgage Association Executive Vice President and CTO Julie St. John, who describes her company as one of the world's largest e-businesses.

She credits Fannie Mae CEO Franklin Raines with the vision that pushed the company into the digital marketplace early on. Today, "most of our applications now are either client/server or Java-based, so we have very few things sitting on the mainframe," St. John says.

In the last year, Fannie Mae's e-business initiatives included developing MORNETPlus on the Web to provide lender customers with one connection for access to multiple underwriting systems, rating agency services, and a range of appraisal, flood, and title service providers; and, a portal to allow lender and investor customers to transact business and find relevant business information; as well as three user-friendly calculators to help borrowers understand the mortgage process. In addition, Fannie Mae purchased the first electronic mortgage on the secondary market and is providing the industry with guidelines on e-mortgages.

Michael Williams, president of Fannie Mae e-Business, says each of those projects presented its own challenges and opportunities: "I think our overarching challenges have been ... the ability to meet the ever-changing business needs of the market."

Although the faltering economy is hurting even the most stable companies, Fannie Mae is in the unusual position of ramping up for more business than usual. "With interest rates dropping, I think if anything we are going to be busier, because when interest rates drop people refinance and then those loans are sold to Fannie Mae," St. John says.

What does the future hold? Williams says the company is going to have to be more aware than ever of the costs of delivering products and services. Another top priority for Fannie Mae is making sure the underlying technology can support outside relationships. "We invest heavily in making sure we have a very well-defined architecture, very well-defined data standards so that we can integrate well with our outside partners," St. John says. "That's really what the name of the game is going to be in the coming decade."

Fannie Mae


* Project: Developing the MORNETPlus 2000 Web environment and

* Michael Williams, president, Fannie Mae.

E-Business: "We recognize that the worth of our technology solutions can only be measured by its use by our customers and its effectiveness in the market. Most importantly, whenever we start a project in e-business we ask ourselves, 'Is this good for the industry? Will it further the ability to put more Americans in homes?' "

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