The Fannie Mae CEO believes profitability is in reach, as long as the government-sponsored enterprise can afford to employ the right people. In his scheduled testimony Wednesday before the House Oversight and Government Reform Committee, Michael Williams said loss mitigation efforts for trouble mortgages originated between 2005 and 2008 are working. The portfolio of these disproportionately troubled loans is shrinking due to these efforts, which include foreclosures. On the other hand, the book of higher-quality mortgages, namely from 2009 to the present, is beginning to take a larger share of Fannie Mae business. The end result, Williams suggests, is the return of the GSE to profitability. Fannie Mae is also undertaking a number of initiatives that we believe will strengthen the industry for the long term, he said. "For example, we are developing new tools and standards to ensure greater visibility into the quality of the loans that are delivered into the secondary market," Williams stated. "This loan quality initiative will reduce the risk for the lender, the investor, the borrower, and ultimately the taxpayer." Williams comments are similar to those of Freddie Mac CEO Ed Haldman, especially in regard to executive pay. Both argue that the recent move to limit bonuses at the GSEs will also limit their ability to hire qualified personnel. Last week, Fannie Mae reported a loss of nearly $5.1 billion for the third quarter and asked the federal government for another $7.8 billion. Write to Jacob Gaffney. Follow him on Twitter @jacobgaffney.