Wacovia, BofA will take Fannie/Freddie hits in 3Q

Wachovia Corp. had “modest exposure” to preferred shares of Fannie Mae and Freddie Mac but took steps early in the third quarter to eliminate these holdings, spokeswoman Christy Phillips-Brown said today.

Related losses will be reflected in third-quarter financial results, Phillips-Brown said. The Charlotte-based bank will provide additional information when chief executive Bob Steel speaks at an investor conference Tuesday in New York, she said. The bank has said it will release third-quarter results on Oct. 22.

Bank of America Corp. holds some preferred shares of these companies and will mark them to market value in the third quarter, spokesman Scott Silvestri said.

The bank hasn’t disclosed the value of these holdings, but it’s believed to be in the millions of dollars, not billions. Bank of America is set to disclose its third-quarter results on Oct. 20.

On Sunday, federal regulators announced a plan to take control of Fannie and Freddie, which buy mortgage loans from lenders, in a step designed to stabilize the mortgage market. Both banks have praised the move as positive for the mortgage market.