NEW YORK (CNNMoney.com) -- Shares of mortgage financing giants Fannie Mae and Freddie Mac both plunged Monday as fears deepened about the credit crisis and housing meltdown.
In midday trading, shares of Fannie Mae (FNM, Fortune 500) were down 20% and Freddie Mac (FRE, Fortune 500) shares were down more than 22%.
Fannie Mae and Freddie Mac are government sponsored enterprises that help the mortgage market function by purchasing pools of loans and packaging them into securities.
With more than a million Americans facing foreclosure and home prices sinking, the two companies have been hit hard.
The companies bought securities backed by risky subprime mortgages when the housing market was booming, but as the housing market has buckled under credit crisis pressures, concerns have grown about their need for more capital. Some analysts have even suggested that a government bailout of the two may be necessary.
Fannie Mae has reported a loss for the past two quarters while Freddie Mac has posted three consecutive quarterly losses. Both companies are expected to report a loss in the second quarter as well.
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[Via Home Mortgage Rates and Real Estate News]
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