Senior Bush administration and Federal Reserve officials called in top executives of Fannie Mae and Freddie Mac on Friday and told them that the government was preparing to place the two companies under federal control, officials and company executives said. The executives were told they and their boards would be replaced and shareholders would be virtually wiped out, but the companies would be able to continue functioning with the government generally standing behind their debt.
The official news release is expected as soon as this weekend.
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