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M REPORT | 63 SECONDARY MARKET THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T FHFA Releases Annual Update on Conservatorship and Securities Recommendations given for safety of regulated entities. T he Federal Housing Fi- nance Agency (FHFA) has released its annual Report to Congress, covering calendar year 2019. The report addresses several topics re- lated to the fulfillment of FHFA's statutory responsibilities and the financial condition of FHFA's regulated entities: Fannie Mae and Freddie Mac (the Enterprises) and the Federal Home Loan Banks (FHLBanks). The report makes recom- mendations to Congress about potential legislation to enhance the safety and soundness of the regulated entities and move our nation toward a stronger, more resilient housing finance system. It also provides an overview of FHFA's policy response to the COVID-19 national emergency. "There are critical vulner- abilities in our housing finance system that put taxpayers and our housing market at risk. The financial stress on our mortgage markets caused by the COVID-19 crisis is only the latest example," said FHFA Director Mark Calabria. "FHFA will continue to take administrative action, pursuant to the Agency's statutory responsibilities, to ensure that the regulated entities operate in a safe and sound manner to foster liquid, efficient, competitive, and resilient national housing finance markets. However, only Congress can resolve the flaws in the structure of the nation's housing finance system. Reform is long overdue. The time to act is now." Included in the Report is an update on the GSE's transi- tion out of conservatorship, and the transfer from the London Interbank Offered Rate. "Preparing for the transition away from LIBOR has been, and will continue to be, an enormous undertaking with a variety of implications for all participants in the global financial system," the report said. "FHFA and the Enterprises have taken a number of important steps in this effort." The report also covered the single-security initiative. "In addition to the internal activities required to develop and test the CSP and UMBS, suc- cessful implementation required the Enterprises and CSS to work with other market participants to facilitate market readiness. This required planning, investment, and preparation on the part of a wide variety of market partici- pants, including MBS investors, dealers, seller/servicers, vendors, and providers of critical infra- structure," FHFA stated,