NEW YORK - The Wall Street Journal says details of the government boost are still being worked out, but both CEOs are likely to depart Fannie Mae and Freddie Mac as part of a bailout plan that may be announced today.
In after-hours trading following the report, shares of the mortgage powerhouses have tumbled. Freddie Mac's shares lost nearly 19 percent, to $4.15, and Fannie Mae's shares lost 24 percent, to $5.34.
Coincidentally, the Mortgage Bankers Association reports more than four million American homeowners were either behind on their payments at the end of June or were in foreclosure. That's a record
Fannie Mae and Freddie Mac are the biggest buyers and backers of
mortgages in the nation, with combined holdings or guarantees of 5
trillion dollars. But between April and June, they lost more than 3 billion dollars, half of it in risky loans with escalating payments.