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The common stocks in Fannie Mae (FNM) and Freddie Mac (FRE) will not go away under the government’s plan to take control of the companies The Federal Housing Finance Agency will act as conservator for the firms.
According to Reuters, "the U.S. Treasury will immediately take $1 billion equity stakes in each company that could grow to be as large as $100 billion each and which would be senior to both existing preferred and common shares."
The dividends that Fannie and Freddie pay on common and preferred stock will go the way of the Dodo.
