WALL STREET Shares in Fannie Mae and Freddie Mac, until recently hovering in the pennies since the 2008 takeover by the federal government of the GSEs, went on a wild ride yesterday after the Federal Housing Finance Agency announced a major settlement on mortgage-backed securities they purchased from Citigroup.
Fannie Mae shares rose as much as 23% and fell as much as 45%; while Freddie shares rose as much as 33% and fell as much as 50%.
Fannie closed the session down 27%, its eighth-worst percentage drop, and Freddie dropped 29%, the sixth-worst on record. Both common and preferred shares in Fannie and Freddie have rallied in recent weeks as both housing giants have reported swelling profits.
Both stocks are traded on the over-the-counter market, which makes them more volatile than stocks listed on the NYSE or NASDAQ. Trading volume was robust, which only added to the volatility.
