Fannie Mae Goes Digital, Again

Since its founding in the 1930’s, the Federal National Mortgage Association, commonly known as Fannie Mae, has made home-ownership possible for millions of Americans, if not more. However, in the past 10 years, so much has changed both in terms of the proliferation of digital technology and the housing market in general. Here’s a look at how Fannie Mae has managed to keep up with the times. 

From 2014 to 2019, it launched its ITSM transformation, deployed a new CRM (Salesforce), transitioned to Office 365 and began its long cloud migration journey (more on that later). However, Fannie Mae is proof that digital transformation is a continuous, never-ending process. 

Like many organizations, the COVID-19 crisis and the resulting economic chaos pushed Fannie Mae into a tailspin of sorts. In response, Fannie Mae decided to not only overhaul its website, but build new digital experiences and truly reimagine how it engaged with its customers. The goal was to not only reduce costs and modernize the user experience, but ensure people had access to the resources they needed to hold on to their homes amidst great economic uncertainty.

In an interview with Quartz Network, Fannie Mae’s Chief Marketing Officer, Steve James, explained, “So revamping our website, employing the cloud based web analytics, we launched a consumer facing Fannie Mae app, which again, we found over 50% of people are coming to our website on their phones. So we said, ‘Well, let’s give it to you in an app form.’ We built corresponding lender facing content to push it out through. We built a customer content portal that we call Max to enable the free flow of information and the push of that information.” 

Fannie Mae also moved its internal systems and customer-facing workloads to the cloud. According to the initial press release, by moving to the AWS cloud, “Fannie Mae was able to deploy its forbearance program into production faster using AWS, initiating 1.4 million single-family forbearance plans since March 2020. With Amazon Kinesis (AWS’s real-time, fully managed, and scalable platform for streaming data) and Amazon Aurora (AWS’s relational database built for the cloud) Fannie Mae can ingest, process, and analyze a greater volume of data faster to accelerate the introduction of new services and scale to meet the unprecedented increase in borrower demand.”

Kimberly H. Johnson, executive vice-president and chief operating officer for Fannie Mae also added, “Our ability to innovate directly improves our ability to meet our housing mission by making it more equitable and affordable to buy or rent a home. AWS enables Fannie Mae’s ongoing digital transformation, and we rely on their innovative technology and cloud services to drive positive change in our industry.”

In the past year, Fannie Mae has also released a number of new AI-powered products and services designed to both expand and protect home-ownership. For example, using automated underwriting software, Fannie Mae can now scan a person’s bank account to identify and track rent payments whether via check, Venmo, Zelle or other platform. As a result, rent payments now count on mortgage applications, dramatically expanding who is eligible for a loan. They’ve also increased the availability of Appraisal Waivers and pushed the industry-wide adoption of digital capabilities such as eClosing solutions and eNotes.

Freddie Mac Reimagines Enterprise Data Managemement

Similar to Fannie Mae, the Federal Home Loan Mortgage Corp. (known as Freddie Mac), also supports the U.S. housing finance system by purchasing, guaranteeing, and securitizing home loans. Over the past decade, they too have undergone a significant transformation. 

Though its digital transformation officially began years before the pandemic, COVID-19 certainly steered its initiative into new directions. To start, the pandemic ignited a home buying and refinancing boom. In order to accommodate this surge in demand, Freddie Mac needed to modernize its legacy systems. 

To start, they launched Employee Technology Experience (ETX), a new workplace technology system that enabled them to transition 95% of their workforce to remote almost overnight.  Secondly, they launched a new initiative called “Modern Delivery.” According to Frank Nazzaro, Freddie Mac’s executive vice president and CIO, the goal of this initiative is to shift “our operating model away from a traditional hierarchical structure toward horizontal, cross-functional teams that are product-aligned and embrace Agile ways of working. Product delivery teams are now blended with both business and IT and driven primarily by the business. Automation is playing a big role as well. Our focus is productivity, and we’ve already seen a 20% increase on that metric largely from the structural changes alone.” 

In addition to support these platforms, Freddie Mac also needed to re-envision its data architecture. In partnership with Collibra, they leveraged the solution provider’s NV platform to centralize its data strategy and build “a cohesive, agile, scalable and cost-effective data program.” This included launching a consolidated business glossary, data dictionaries, and a new Data Governance COE. 

As explained by Aravind Jagannathan, the chief data officer and vice president at Freddie Mac, “What started as a reducing cost or looking at an infrastructure play, moving from physical data assets to the cloud, as well as enhancing our resiliency, has quickly morphed into meeting business demand and objectives whether it be for sourcing, servicing or securitization of our loan products.”