The top headline on CNBC this morning is "Fannie, Freddie Shareholders Face Wipeout"

Details of a plan that could lead to a government takeover of Fannie Mae and Freddie Mac are expected to be announced Sunday.

The Treasury Department and the mortgage financing company’s regulator, the Federal Housing Finance Agency have called a press conference for 11 am New York time.

While details of the plan could not be confirmed, these people point out that Treasury Secretary Hank Paulson has in the past insisted that shareholders, including common and preferred shareholders, pay the ultimate price in absorbing losses. That would suggest both classes of shareholders could be wiped out or severely diluted in a reorganization plan.

The announcement may only detail a temporary solution:

"As I understand it, whatever proposal Secretary Paulson is going to make is a proposal to get us over this hump of instability and uncertainty," said Vice Presidential hopeful Sen. Joe Biden on NBC’s Meet the Press television program on Sunday.

"It’s not an official reorganization. It will be left to next administration and Congress to make those judgements," he added.

According to Rep. Barney Frank yesterday:

 

The federal government was expected to control the companies for at least a year as it considers whether they should remain government-run, or be restructured.

Frank told Reuters that all shareholders would be disadvantaged under the plan and added that "the government will act as the new management," implying the chief executives would be ousted.

Frank spoke to U.S. Treasury Secretary Paulson on Friday about the plan to put the companies into federal conservatorship to protect the interest of all parties.

No word on where to watch the news conference, but I’m guessing that CNBC is probably broadcasting it.