As Part of Open Access Initiative Fannie Mae Waives FHA and VA Underwriting Surcharges, Lenders Now Pay One Per-Loan Charge For Unlimited Access to Multiple Underwriting Systems; HUD Approves Desktop Underwriter and pmiAURA for FHA Loans.

WASHINGTON--(BUSINESS WIRE)--Aug. 18, 1999--

As part of the pledge Fannie Mae made last spring, the company today unveiled its "Open Access" system, where lenders pay one fee for unlimited access to multiple underwriting engines.

The company announced that beginning September 1, 1999 lenders will pay one per-loan charge for unlimited access to any automated underwriting system on the MORNETPlus network. Additionally, Fannie Mae (NYSE:FNM
FNM Free National Movement (Bahamas)
FNM Foot and Mouth ), the nation's largest source of financing for home mortgages, announced that effective today it will eliminate the $20 surcharge for lenders using Desktop Underwriter and pmiAURA(SM) to underwrite their FHA loans.

In a separate announcement made yesterday through its mortgagee letter 99-26, the U.S. Department of Housing and Urban Development (HUD) approved the use of Desktop Underwriter and pmiAURA for underwriting government loans. The approval adds to the efficiencies the MORNETPlus network provides to lenders and makes it easier for them to offer the benefits of automated underwriting to their FHA customers.

"Unlimited access to the widest variety of automated underwriting systems in one place, for one fee will help lenders reduce their costs and enhance their business significantly. Fannie Mae remains committed to opening our network to all industry participants, including Freddie Mac," said Terri Davis, Fannie Mae's vice president for technology sales and consulting.

To further reduce costs, the Open Access initiative also includes:

-- The elimination of charges for multiple submissions of a loan to

Desktop Underwriter;

-- Refunds of underwriting charges on mortgage loan products that

require the use of Desktop Underwriter, such as Flexible 97, and

are delivered to Fannie Mae on June 1, 1999 and thereafter; and

-- The elimination of the additional charge for using S&P LEVELS to

obtain risk grades and credit enhancement costs.

"We are happy to provide lenders with the ability to offer their FHA customers loan decisions in just minutes," said Davis. "Fannie Mae is working closely with lenders to provide the mortgage finance industry with an open system where lenders can access multiple automated underwriting systems and a wide range of additional mortgage transaction services to process all their lines of business, including FHA. HUD's approval of Desktop Underwriter and pmiAURA, combined with today's launch of our new one-time fee pricing structure moves us all much closer to making that open systems vision a reality."

Automated underwriting has played an increasingly important role in the industry over the last few years and the pmiAURA System has been widely used by lenders since 1993. Lenders have been using Desktop Underwriter since 1995 and currently nearly 950 lenders subscribe to Desktop Underwriter to process as many as 33,000 loan submissions a day.

"PMI is dedicated to increasing homeownership opportunities and we are proud to work with Fannie Mae and our lending customers to bring this kind of efficiency to the mortgage marketplace," said Steve Smith, PMI's President and Chief Operating Officer. "Accessing pmiAURA for underwriting government loans through Fannie Mae's open access system is an example of PMI's leadership role in applying technology to the benefit of lenders and consumers, and of our continued partnership with Fannie Mae."

"We are looking forward to offering our FHA customers loan decisions from our loan officers at point of sale," said Jill Belconis, president of Shelter Mortgage Corporation. "By offering a wide range of mortgage transaction services to process all of our business, including FHA, and by eliminating the duplicate underwriting fees, Fannie Mae continues to provide the most comprehensive, secure and open system in the mortgage finance industry."

Fannie Mae currently provides access to the widest variety of automated underwriting services to lenders for conventional, jumbo, sub-prime, and government mortgages on its MORNETPlus network through agreements with GMAC/Residential Funding Corporation, GE Capital Mortgage Services, Merrill Lynch Credit Corporation, PMI Mortgage Services, and Standard & Poor's.

Later this summer Countrywide's e-Approve and CLUES will be available to lenders on the MORNETPlus network. In addition, lenders can access several credit reporting agencies and their affiliates, and other technology tools over the MORNETPlus network - making it the most comprehensive and cost effective network available in the industry.

Fannie Mae is a New York Stock Exchange company and the largest non-bank financial services company in the world. It operates pursuant to a federal charter and is the nation's largest source of financing for home mortgages. Over the past 30 years, Fannie Mae has provided nearly $2.5 trillion of mortgage financing for over 30 million families.

More information about Fannie Mae can be found on the Internet at http://www.fanniemae.com.

Style Usage: Fannie Mae's Board of Directors has authorized the company to operate as "Fannie Mae," and the company's stock is now listed on the NYSE as "Fannie Mae." In order to facilitate clarity and avoid confusion, news organizations are asked to refer to the company exclusively as "Fannie Mae."