Layton described the lending infrastructure as the hundreds of computer procedures, people and years of experience Freddie and Fannie have accumulated over the years.

"While we are conserved we don't take positions on any of the different specific proposals on reforming the GSEs, so I have no interest any specific proposal or another. Our concern is the odds that whatever comes up actually works," Layton said, adding that the infrastructure is the key to making sure that happens.

Awareness and understanding of the importance of the infrastructure is still not widespread among legislators and legislative staff, Layton said, but he told the audience that he had been relieved and gratified to note the numbers of federal legislators had begun to understand.

"They are beginning to realize this is not the infrastructure of one company, this is the infrastructure of an entire industry," he said. Later, answering questions, Layton explained that maintaining the lending infrastructure was crucial to maintaining access to the secondary market for smaller and medium sized mortgage loan originators. If the infrastructure was not maintained, he said, larger lenders who developed their own infrastructure and partnered with the two GSEs would have an advantage over smaller institutions that would have to utilize the existing infrastructure.

Layton's also addressed GSE reform in Congress.

"I have no direct opinion about how long this will take," Layton said. "When I ask people with a lot of experience and familiarity with this process, there are opinions all over the map. A few, a very few, hardened optimists think Congress could come with a GSE reform plan in 2014, but this is very minority view. Another minority view says 2015, after the elections in 2014," he said, adding that he thinks 2015 is most likely.

If Congressional GSE reform should go into effect in 2016, Layton said it is likely that with five years to implement the changes, a new secondary market would begin to function in 2020 or 2021.

Layton also addressed the notion that, absent any legislative action, Freddie and Fannie are merely in a holding pattern and have not really begun to reform themselves.

"Nothing could be further from the truth," he said.

He outlined how Freddie Mac had begun to work on different ways to lower the credit risk of the mortgage industry to taxpayers.

That included Scorecard, a device launched last year by the Federal Housing Finance Agency to document the progress the GSEs are making toward regulators' goals. And he said Freddie Mac had launched an approach this year through which part of the credit risk of mortgages were sold off to large numbers of investors, a process he called originate to distribute, contrasting it with the previous approaches of originate to sell or originate to securitize.