The U.S. government is planning to take over Fannie Mae and Freddie Mac on Sunday, September 7 and all shareholders of the two mortgage giants will lose out. 

This is expected to be announced later today, and is believed to be possibly the largest financial bailout in the nation’s history, in an attempt to prevent further damage to a housing market experiencing the worst downturn since the Great Depression.

The government will run the two companies suggesting that the chief executives would be removed. The two government-sponsored enterprises were sent a letter by their regulator, the Federal Housing Finance Agency, that detailed problems at the companies and said why the federal government was taking control.

The two companies own or guarantee almost half of the country’s $12 trillion in home mortgage debt and being placed in receivership would be a major blow to the administration and likely to have adverse effects on the dollar as well as confidence in the administration. A bailout would avoid the more onerous step of being placed in a receivership in the interests of debtholders.