2The Administration will work with the Federal Housing Finance Agency (“FHFA”) to develop a plan to responsibly reduce the role of the Federal National Mortgage Association (“Fannie Mae”)and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) in the mortgage market and,ultimately, wind down both institutions. We recommend FHFA employ a number of policylevers – including increased guarantee fee pricing, increased down payment requirements, andother measures – to bring private capital back into the mortgage market and reduce taxpayer risk.As the market improves and Fannie Mae and Freddie Mac are wound down, it should be clear that the government is committed to ensuring that Fannie Mae and Freddie Mac have sufficientcapital to perform under any guarantees issued now or in the future and the ability to meet any of their debt obligations. We believe that under our current Preferred Stock Purchase Agreements(PSPAs), there is sufficient funding to ensure the orderly and deliberate wind down of FannieMae and Freddie Mac, as described in our plan.Successful reform will require more than just winding down Fannie Mae and Freddie Mac andreducing other government support to the housing market. In addition to fully implementing thereforms in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) (Pub. L. 111-203), the Administration will mobilize all tools available to address thenation’s broken system of mortgage servicing and foreclosure processing. Taken together, thesesteps will help restore trust in the underlying foundation of the mortgage market so borrowers,lenders, and investors have the confidence to purchase a home, issue a loan, or make aninvestment.The government must also help ensure that all Americans have access to quality housing thatthey can afford. This does not mean our goal is for all Americans to be homeowners. We shouldcontinue to provide targeted and effective support to families with the financial capacity anddesire to own a home, but who are underserved by the private market, as well as a range of options for Americans who rent their homes.Finally, our plan presents several proposals for structuring the government’s long-term role in ahousing finance system in which the private sector is the dominant provider of mortgage credit.We evaluate these proposals according to their effects on four key criteria: access to mortgagecredit; incentives for investment in the housing sector; taxpayer protection; and financial andeconomic stability. We ask Congress to work with us to determine the right balance of prioritiesfor a new, predominantly private housing finance market as soon as possible.