Michael Williams, the president and chief executive of Fannie Mae, said Wednesday that the government-sponsored enterprise is preparing for an expected overhaul of the U.S. housing system by Congress and the Obama administration.

"Our company knows the change is coming. We understand that many options are on the table," said Williams in a speech before Women in Housing and Finance. "We feel confident that we are taking the steps necessary to prepare for all outcomes and put the company on the right track."

He declined to comment on current proposals being aired on GSE reform.

"There are many options to choose from, and many different paths we can take. As an industry, we have to make sure we get it right," he said.

Williams said the greatest contribution Fannie can make is to continue to focus on strengthening its business, help struggling borrowers and cut legacy costs.

"Step-by-step, we are putting in place a new foundation for our industry," he said. "It's a foundation based on the right lending standards and on a broad examination of what constitutes sensible risk."

However, Williams acknowledged there is still "a lot of work to do before the housing market is back on track."

For example, though some private capital has returned to the housing market, "as long as the housing market is shaky, mortgage funding will be at risk."

Over the past two years, Fannie has provided more than $1 trillion in liquidity to the market, and has doubled its market presence since 2005, he said.

"Liquidity is why the GSEs were created - to make sure lenders have plenty of money to lend for safe loans, for all families, for both rental and single-family housing, in all communities, at all times," Williams said. "That's the vital role we are playing today."

- Donna Borak/American Banker

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