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Mortgage Company Cashes in on Web Services: Page 5 of 16

Making The Transition

How did Freddie Mac get from green-screen batch jobs to modern interactive Web apps? In a word, planning. "Having an overall architectural plan and agreeing on the overall high-level architecture at the start were key points," says Steve Manning, Freddie Mac's VP of computer and network operations, business information services division. "And also taking one step at a time and trying not to make too many changes at once." Not that the executive staff had much choice. The project began in the middle 1990s and won't be completed until the end of 2007. What's important isn't how fast they made the change, but the careful and deliberate sequence of events that has led up to their Web services embrace.

The first step was moving to a private all-IP network. The company knew any solution to moving off the mainframe was going to involve Internet protocols, so admins created a transition plan. "We had an opportunity to get our feet wet with Internet technologies without getting exposed," says Bryant Potosky, enterprise architect at Freddie Mac. "In the early 1990s, we created an extranet, based on a private IP network that was very controlled from a security perspective. That was a key stepping stone. We could monitor and mitigate many of the security issues before we had to open up to the public Internet."

This sounds simple, but in reality was probably the most difficult step. Part of the problem is the sheer number of entities involved in processing and selling loans, and that each of these entities had to connect to Freddie Mac's private IP network.

"There are so many moving parts and players," says David Barkley, the company's director for industry standards and practices. "The lenders don't have total control and have to interact with many others, such as title agents and real estate agents." And when you factor in 3,000 county clerk offices, each with different documentation requirements, and hundreds of banks and savings and loans, the cast of characters becomes enormous.