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26 CALABRIA ON GSE REFORM: "HEADED IN THE RIGHT DIRECTION" Fannie Mae and Freddie Mac are building the capital necessary to get out of conservatorship but there is still a little way to go, according to Federal Housing Finance Agency (FHFA) Director Mark Calabria. He recently spoke with FOX Business about the GSEs leverage and Fannie and Freddie's path ahead. "I believe that under the statute, I am required to fix [Fannie and Freddie]," Calabria said. "Fannie and Freddie are less leveraged than when I started," Calabria added. "We're going in the right direction." According to Calabria, regulators will know what the target capital level for Fannie Mae and Freddie Mac will be sometime next year, noting that he'd feel comfortable with "a whole lot more than they have today." Fannie Mae reported a net income and a comprehensive income of $4.0 billion for Q 3 2019, up from a net income of $3.4 billion and comprehensive income of $3.4 billion for the second quarter of 2019, while Freddie Mac posted a $1.7 billion net income. According to the GSEs, these incomes represent yet another step toward adding the capital necessary to move toward private ownership. Fannie Mae was the largest issuer of single-family mortgage-related securities in the secondary market during the first nine months of 2019. e company's estimated market share of new single-family mortgage- related securities issuances was 39% for the third quarter of 2019. Freddie Mac reports that conservatorship capital reduced by $5.2 billion from the prior year, due in part to credit risk transfer (CRT) activity, home price appreciation, legacy asset dispositions, and a decrease in deferred tax assets. e Federal Housing Finance Agency (FHFA) recently released a new Strategic Plan for the Conservatorships of Fannie Mae and Freddie Mac and a new 2020 Scorecard for Fannie Mae, Freddie Mac, and Common Securitization Solutions. According to the FHFA, the three objectives of this new Strategic Plan and Scorecard are to ensure that the GSEs foster competitive, liquid, efficient, and resilient (CLEAR) national housing finance markets; operate in a safe and sound manner appropriate for entities in conservatorship; and prepare for their eventual exits from the conservatorships. "Our nation's mortgage finance system is in urgent need of reform," Calabria said. "e vision for reform articulated in the Strategic Plan and advanced in the Scorecard will serve borrowers and renters by preserving mortgage credit availability, protect taxpayers by ensuring Fannie Mae and Freddie Mac can withstand an economic downturn, and support a strong and resilient secondary mortgage market." " e vision for reform articulated in the Strategic Plan and advanced in the Scorecard will serve borrowers and renters by preserving mortgage credit availability, protect taxpayers by ensuring Fannie Mae and Freddie Mac can withstand an economic downturn, and support a strong and resilient secondary mortgage market." 62