WASHINGTON — Freddie Mac chairman and chief executive officer Richard Syron will likely be forced to give up leadership of the embattled government-sponsored enterprise as part of a rescue by the Treasury Department, American Banker has learned.

Sources were less certain about the fate of Fannie Mae or its CEO, Dan Mudd.

But both executives met separately Friday with Treasury Secretary Henry Paulson and James Lockhart, the director of the Federal Housing Finance Agency.

Freddie has been searching for a new CEO for more than a year though it remained unclear Friday whether a successor has been found. Mr. Syron has held both titles since December 2003 despite rulings from regulators that the positions must be split.

Spokeswomen for Freddie and Fannie both declined to comment. The Wall Street Journal reported that Treasury is putting the finishing touches on its plan to shore up both companies.

A Treasury spokeswoman declined to comment.

Legislation enacted in July gave Treasury the power to purchase equity and debt from the GSEs and gave the Finance Agency authority to put Fannie or Freddie into a conservatorship. The Treasury hoped that merely taking these steps would calm markets and lessen the prospects of a government intervention.

But that has not happened. The stock prices of both companies have remained volatile and investors have demanded higher yields on GSE debt.

Fannie has already made significant management changes, announcing Aug. 27 that Robert Levin, its chief business officer, and Stephen Swad, the chief financial officer, were out.

Mr. Syron's time at Freddie has been contentious, including attempts to block reform measures aimed at the GSEs. In February 2007 he criticized attempts to force Fannie and Freddie to raise capital and curb new programs.

Congress ultimately passed a reform package in July establishing a new regulator for the GSEs and giving it more control over their capital.

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