Friday, July 11, 2008

Fannie and Freddie Shares Crash

Fannie Mae and Freddie Mac shares were down nearly 50% in early trading as investors worried that the companies will suffer larger losses and default on debt.

Freddie Mac plunged 48 % 4.10 dollars at the Wall Street open following a 22% slide on Thursday and Fannie Mae lost 46% to 7.07 dollars after a 14% drop in the prior session.

The shares of the two firms have lost over 80% of their value since the start of the year.

Freddie Mac has a loan portfolio of 1.5 trillion dollars and Fannie Mae's is over 700 billion. Together they own or guarantee some 5.2 trillion dollars in loans, or about 40% of the total value of home loans in the United States.

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