"The principle guiding us is that FHFA is focused on how we manage the present," said Watt, a former North Carolina congressman, "(which includes) the present conservatorships of (Fannie and Freddie) and the present housing finance market under the present statutory mandates."

Watt also cited the need for Fannie and Freddie to focus on needs of the present, including their eventual emergence from government conservatorship, and elected not to address housing finance reform legislation.

That's not FHFA's job, Watt said.

"Congress and the (Obama) administration have the important job of deciding on housing finance reform legislation, not FHFA," Watt said. "Instead, our task is to continue to fulfill our statutory mandates, to execute our strategic plan and to manage the present status of Fannie Mae and Freddie Mac."

FHFA's first strategy, Watt said, is to maintain foreclosure prevention activities and credit availability for new and refinanced mortgages to "foster liquid, efficient, competitive and resilient national housing finance markets." 

Central to this strategy will be Fannie's and Freddie's actions to increase liquidity in the present single-family housing market, improve servicing standards and foreclosure prevention actions, and foster greater activity in the area of affordable multifamily properties. Watt said that would involve relaxing previous mortgage standards and payment history requirements.

In addition, the FHFA will not reduce loan limits as previously discussed, Watt said. The move comes in hopes of preventing further compromise of a housing market just beginning to emerge.

The FHFA also will start a Neighborhood Stabilization Initiative to helps areas hardest hit by foreclosure in the past few years. A pilot project will be undertaken in areas of Detroit, with eventual results guiding deployment strategies in other parts of the country.

The second strategy would involve efforts to reduce taxpayer risk by scaling back mortgage portfolios for both Fannie and Freddie, and increase the role of private capital in the mortgage market, Watt said. The 2014 plan called for $30 billion in risk transfers, an amount that would triple to $90 billion under Watt's new strategy.

The FHFA called for a reduction in both Fannie's and Freddie's retained portfolios to no more than $250 billion each by 2018. Watt said the agency also wants to strengthen the private mortgage insurer market to make them more effective supporters within the market.

The third and final strategy seeks to build a new single-family securitization infrastructure for use not only by Fannie and Freddie but also by other participants in the secondary markets. This would involve a common securitization platform and moving Fannie and Freddie to a single common security as a means to improve liquidity and increase efficiencies by leveraging the current systems and resources.

"Implementing these objectives will require ongoing analysis, evaluation and input," Watt said. "FHFA will proceed with these steps in a transparent way that incorporates the feedback of the public and stakeholder groups whenever possible."

Watt's speech came at what could be a critical time for Fannie, Freddie and the mortgage market they serve. Reform measures for the two enterprises seem to have stalled in Congress, while naysayers have said they worry looser standards could lead the $14.4 trillion mortgage market into another housing bubble-and-burst cycle.

Despite concerns, a stuttering housing market is holding back overall economic growth, according toFederal ReserveChair Janet Yellin and TreasurySecretaryJacob Lew. FHFA's plan was designed to balance both risks and rewards while continuing to help the housing market grow, Watt said.