Fannie Mae, Freddie Mac price targets cut to zero

Shares of mortgage finance companies Fannie Mae and Freddie Mac tumbled Monday after a Keefe, Bruyette & Woods analyst downgraded the two to the firm's lowest rating, saying their common and preferred shares would be "worthless" given the nearly $100 billion they will continue to owe the government, even if recapitalized.

Fannie shares fell 26 cents, or 17.8 percent, to $1.20. Freddie shares tumbled 31 cents, or 18 percent, to $1.41.

The two government-sponsored enterprises, or GSEs, buy up mortgages from banks. In order for them to survive, they need to be recapitalized, said analyst Bose George in a note to investors.

Read Full Article from BusinessWeek

- Posted: 2009-10-19 13:49:40

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