Calabria said the Strategic Plan outlines FHFA’s priorities that will guide Fannie and Freddie’s operations. The Scorecard is FHFA’s primary tool to hold Fannie and Freddie accountable for achieving those priorities.

The three objectives of the Strategic Plan and Scorecard are to ensure that Fannie and Freddie:

• Focus on their mission of fostering competitive, liquid, efficient, and resilient housing finance markets.
• Operate in a safe and sound manner appropriate for entities in conservatorship.
• Prepare for their eventual exits from the conservatorships.

"Together, the Strategic Plan and Scorecard represent a new approach to operating the conservatorships of Fannie and Freddie," Calabria said. "FHFA has already started to put this new approach into action... To focus Fannie and Freddie on their core mission, our guide will always be: 'What does the statute say?'"

Calabria noted that under the Housing and Economic Recovery Act of 2008, the FHFA Director is responsible for ensuring the national housing finance markets are competitive, liquid, effective, and resilient. "To achieve this objective, FHFA is focusing the Enterprises on providing access to smaller market participants and community lending institutions."

The Strategic Plan and Scorecard direct Fannie and Freddie to support the development of a Qualified Mortgage standard that applies equally to all players originating responsible loans, with no special advantages for anyone, Calabria further notes.

"No policy change will matter unless Fannie and Freddie are financially viable and strong enough to withstand a downturn in the economy," Calabria said. "That is why the second objective of the new Strategic Plan and Scorecard is to ensure Fannie and Freddie operate in a safe and sound manner. Meeting FHFA’s standards of safety and soundness is paramount while Fannie and Freddie remain in conservatorship. It is also a prerequisite for each Enterprise to exit conservatorship."

Calabria noted that Fannie and Freddie are note currently equipped to withstand a downturn similar to the one experienced in 2007 and 2008. "But I believe they are capable of and committed to getting there. In fact, today I think we see the strongest board and management teams in the history of these companies. I will measure progress by looking at whether they are moving in the right direction and as quickly as possible without jeopardizing their mission."

He said that meeting this objective and implementing the Strategic Plan and Scorecard will not be calendar driven. "It will be driven by meeting key mile markers between today’s unsustainable status quo and a reformed and resilient housing finance system."

Fannie and Freddie cannot change their risk profiles overnight, he said, adding that the Strategic Plan and Scorecard direct them to begin the process of calibrating their risk to their capital levels.

Furthermore, the new Strategic Plan and Scorecard direct Fannie and Freddie to support FHFA’s effort to address areas of overlap. "We will also ensure that the secondary market continues to provide liquidity and access to credit."

"The objectives of the new Strategic Plan and Scorecard–and the changes we have made the past 6 months–lay the foundation for Fannie and Freddie to ultimately raise private capital," Calabria says. "FHFA’s job is to establish the conditions necessary for Fannie and Freddie to operate outside of conservatorship in a safe and sound condition, to meet their mission, and to protect taxpayers. The Strategic Plan and Scorecard are focused on putting those conditions in place within the Enterprises themselves. When implemented, Fannie and Freddie will operate appropriately while in conservatorship, avoid the imprudent practices of the past, and serve a more counter-cyclical role in the market."