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Mortgage Company Cashes in on Web Services: Page 4 of 16

Freddie Mac Infrastructure

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This makes for more nimble financial markets, in which Freddie Mac's banking customers get their money quickly--in some cases more quickly than they can accommodate. "With the older system, when we purchased a loan, we would turn the money back around to the lender in seven to 10 days," says Edward Albrigo, vice president of the enterprise program office for Freddie Mac's mortgage operations and technology division. "Now it can take as little as 24 hours, and in some cases the back office systems of our lenders weren't prepared to get that fast a response." Imagine going to your bank and having it say it can't deposit your money until tomorrow. Fortunately, these back-office systems have been updated.

The mainframes haven't completely gone away, of course. Freddie Mac still uses them for a variety of applications and is even considering using new ones to leverage its big IBM iron (see "Web Services Won't Kill Mainframes," below).

The loan origination side of the house isn't the only place seeing some Web action. The packaging of Freddie Mac's securities is also heavily Web-dependent now too. "Before the Web, we would call our dealers ... when we had debt that we wanted to issue," says Bill DeLeo, Freddie Mac VP and business information officer, investment and capital markets division. "Now we can be much more efficient in our auctions, and we have saved from three to five basis points in selling our securities." (A basis point is one-hundredth of a percent.) That works out to nearly $1 billion over the past several years.