The passage of Dodd-Frank financial reform mandates that the government-sponsored enterprises, Fannie Mae and Freddie Mac, wind down their mortgage portfolios in an orderly fashion. While there is considerable speculation as to which players in mortgage finance will eventually take ownership of these assets, hedge funds likely will play a large part in the game, according to the chief operating officer of an Orange County, Calif.-based software provider. Todd Mobraten of RES.NET, a subsidiary of US Real Estate Services, a vendor of mortgage-related software, said that investors and real estate agents alike are diversifying to meet market needs. "We are going to see a large selling off of these portfolios in a big way, at least for the next two years," said Mobraten, who's software hosts and assists the management of real estate assets for many hedge funds in the country.  Hedge funds are taking an interest in REOs and short sales for the first time, he said, and are diversifying their porfolios. Mobraten said changes at his own company in the last six months reflect the evolving landscape. RES.NET is now offering Facebook-type connections between the real estate supply chain providing sellers, buyers and real estate professionals a new avenue to communicate the flow of their assets. "Hedge funds need to stay cyclical," Mobratan added. "In this market, everyone needs to embrace new ways to move their business forward. Write to Jacob Gaffney. Follow him on Twitter @jacobgaffney.