Leland Brendsel: "The tide is turning toward the small lender".

Freddie Mac's long-time chief believes technology combined with local market knowledge is a powerful combination

Freddie Mac, which so many bankers rely on for access to the secondary mortgage markets, isn't resting on its laurels, and that's good news for community banks.

Freddie is doing nothing less than spectacular business these days and it's pouring the full force of this prosperity into a plan to bring more cost-efficient technology to banks, give them greater ability to sell subprime loans and help them better explore under-utilized minority home mortgage markets. If the plan works, Freddie should be able to continue its double-digit growth.

The man behind the plan is Leland Brendsel, who has been Freddie's chief executive officer for 15 years, unusual longevity for a top CEO these days. He helped Freddie become a viable public corporation and made it a worthy competitor of Fannie Mae. He can also claim credit for some spectacular growth.

Copping its share of the economic boom, the company just completed a record performance year, with net income surpassing $2 billion for the first time. The company was able to post an extraordinary 31% increase in net income and a 28% increase in earnings in 1999, while keeping its credit and interest-rate risk at historically low levels. "We remain committed to mid-teens earnings growth over the next few years," says Brendsel.

But Brendsel is not without his woes. The government wants to increase Freddie's affordable housing goals, a move that could threaten its profitability. And the company is saddled with a pesky discrimination lawsuit that just won't go away and could sour its worthy efforts in expanding minority hiring.

Brendsel grew up on a farm near Sioux Falls, S.D. where he says the sense of community was very strong. That he would end up at Freddie, a cornerstone of the American community, is certainly no stretch. When he was studying finance and economics in graduate school at Northwestern University, he found the curriculum "awfully abstract" and longed for the handson sense of productivity he experienced on the farm. It's apparent that he's rediscovered it at Freddie. "Even though we're a financial institution, I sense that we are directly involved with people who are acquiring the American dream," he explains.