The housing market still remains a fragile element of the economy, Assistant Treasury Secretary Mary Miller said, outlining the government's myriad efforts to get the industry back on its feet. Miller spoke at the Women in Housing Finance annual dinner Thursday night, highlighting the administration's programs to pull housing out of its multiyear malaise. Included in the effort: A working group of members from the Federal Housing Finance Agency and the Federal Housing Administration to consider changes to pricing and other standards at Fannie Mae, Freddie Mac, and the FHA, with the objective of reducing their market share over time. "Treasury has created new programs to better address current challenges, like the $7.6 billion Hardest Hit Fund, which allows state housing finance agencies in our nation’s hardest hit housing markets to design locally targeted foreclosure prevention programs," Miller said. She oversees federal borrowing at the Treasury, which includes managing the U.S. national debt. Miller also advises Treasury Secretary Timothy Geithner on the effect of federal policy and regulation on financial markets, including the administration’s plan for housing finance reform. More than 4.5 million mortgage modifications were started between April 2009 and April 2011, including more than 1.5 million trial modification starts through the administration’s Home Affordable Modification Program. Still, home prices have dropped more than 30% from their 2006 peak, housing starts are one-third the rate prior to 2005 and 3.5 million existing homes are on the market with another 3.8 million units in the shadow inventory. Foreclosures remain high and one in four homeowners is underwater, owing more than their homes are worth. More recently, Treasury issued a program directive for the largest mortgage servicers participating in the Making Home Affordable Program that requires them to assign homeowners applying for assistance a single point of contact to improve servicer accountability and efficiency. FHFA has helped, directing Fannie Mae and Freddie Mac to align servicing guidelines. "But the current government presence in the market — with over 90% of new mortgages backed by the government — is neither sustainable nor desirable for the long term," Miller said. "We also recognize the necessary balance that exists between moving swiftly to reduce the government’s footprint in the market and ensuring that any actions do not disrupt the still fragile housing market." Treasury is also taking steps to gradually wind down its agency-guaranteed mortgage-backed securities portfolio acquired during the financial crisis. The Treasury held nearly $200 billion MBS at one point, and began shedding these assets in March. Miller suggested reform of Fannie and Freddie may not take as long as the five to 10 years that others have suggested, noting she hopes to get legislation passed within two years. Write to Kerry Curry. Follow her on Twitter @communicatorKLC.