Federal National Mortgage Association

You're paying your bills, but your landlord isn't. And you're the one holding the eviction notice. This is becoming an all-too-familiar scenario for thousands of renters nationwide who have become the unintended victims of foreclosures. Banks are booting good tenants onto the streets with little to no notice after seizing a property from a delinquent owner, ignoring tenant leases.

The Obama administration is considering an overhaul of Fannie Mae and Freddie Mac that would strip the mortgage finance giants of hundreds of billions of dollars in troubled loans and create a new structure to support the home loan market, government officials said. The bad debts the firms own would be placed in new government financial institutions -- so-called bad banks -- that would take responsibility for collecting as much of the outstanding balance as possible.

Fannie Mae posted a massive quarterly loss, its third straight, on the protracted U.S. housing market slump, prompting it to slash its dividend and set plans to raise $6 billion of fresh funds. Still, executives of the largest U.S. provider of home financing expressed optimism Tuesday that the worst of the credit turmoil that erupted from the housing crisis might have passed. Their comments triggered an 8.9% rise in Fannie Mae shares and supported a wider advance in U.S. stocks.

The regulator who oversees national banks is protesting an agreement by Fannie Mae and Freddie Mac to buy mortgages only when lenders used outside home appraisers. John Dugan, the U.S. comptroller of the currency, said the accord that the two government-sponsored mortgage finance giants negotiated with New York Atty. Gen. Andrew Cuomo and their federal regulator was illegal, could hurt the home-loan industry and should be withdrawn.

Fresh concerns about the troubled housing and mortgage markets were triggered Thursday by speculation that the government would be forced to bail out Fannie Mae and Freddie Mac, the twin pillars of the home loan industry. Analysts worry that the mortgage giants won't be able to raise enough money from investors to cover rising losses from loan defaults. Those doubts have ramped up a sell-off by investors, sending shares of both companies to 17-year lows.

Acting to prevent a severe disruption of the mortgage market, the federal government stepped in Sunday with plans for a sweeping aid package designed to bolster confidence in battered home-loan giants Fannie Mae and Freddie Mac. The Bush administration said it would ask Congress to authorize the Treasury Department to lend Fannie and Freddie more money than current limits permit and buy stock in the two companies.

Treasury Secretary Henry M. Paulson, increasingly the point man for the Bush administration as it struggles to steady the economy, made an emergency trip to Capitol Hill on Wednesday seeking to quell a rebellion among conservatives over the plan to shore up struggling mortgage giants Fannie Mae and Freddie Mac.

John McCain has been winning over skeptical conservatives by embracing tax cuts while promising a new era of fiscal discipline if he wins the White House. But his fragile relationship with the Republican base will be tested again as he decides whether to support controversial plans for addressing the mortgage crisis.

Fannie Mae on Tuesday outlined a new pricing policy aimed at helping the mortgage finance giant gird against increased credit risks and losses from home loans it buys from mortgage lenders, but the changes could end up squeezing out many borrowers. Fannie Mae will double the fee it charges lenders and brokers to 0.50% from 0.25% beginning Oct. 1.

Mortgage finance company Fannie Mae acknowledged Tuesday that it spent more than $6,000 on a golf outing after it was seized by the government earlier this year but said it was halting similar company-sponsored events. Dallas-Fort Worth-area television station KTVT reported Monday night that Fannie paid for 20 golfers, including several company executives, to attend a Sept. 29 golf excursion in Texas.