TIMELINE: Government takes over Fannie Mae, Freddie Mac

The U.S. government on Sunday seized control of mortgage finance companies Fannie Mae and Freddie Mac, launching what could be its biggest federal bailout ever, in a bid to support the U.S. housing market and ward off more global financial market turbulence.

Their top executives were ousted. Freddie Mac chief executive Richard Syron and Fannie Mae's CEO, Daniel Mudd, were replaced by David Moffett, a former top official at US Bancorp and Herb Allison, formerly with Merrill Lynch and pension fund TIAA-CREF.

In addition, the U.S. Treasury will immediately take a $1 billion equity stake in each company in the form of senior preferred stock and if needed could inject up to $100 billion into each firm.

The government's senior preferreds stock would rank above both existing preferred and common shares and will carry warrants that could give the government an ownership stake of 79.9 percent.

Treasury also set up a program under which it would buy mortgage-backed securities currently held by Fannie Mae and Freddie Mac to pump fresh funds into the mortgage market. It said it would begin buying MBS later this month, and it would have authority to make such purchases through December 31, 2009.

Below is a recap of events since July:

July 13 -- After a weekend of negotiations, the Treasury and the Federal Reserve announce emergency measures to backstop Fannie Mae and Freddie Mac. The two companies will get access to credit lines, including direct access to Fed money if necessary, and a provision for the Treasury to take an equity stake in the companies if required. The Securities and Exchange Commission announces measures aimed at stemming the spread of false rumors.

July 15 --SEC Chairman Christopher Cox says the SEC will impose an emergency measure designed to make it more cumbersome to sell short the shares of Fannie Mae, Freddie Mac and 17 other major financial institutions.

Fannie Mae and Freddie Mac shareholders still find no overt assurance regarding the fate of common stock in any government bailout. Freddie Mac shares plunge 26 percent and Fannie Mae plummets 27 percent.

July 16-17 -- Equity investors finally sense some relief as the U.S. government gains some key support for the rescue package. Short sellers begin to back off the stocks ahead of the SEC's emergency short-selling rules taking effect.

Freddie Mac completes its second successful debt sale of the week, and confidence rises about the fate of the rescue effort moving through Congress. Fannie Mae shares rise more than 18 percent and Freddie Mac adds nearly 22 percent.

July 21 -- Freddie Mac has another successful debt sale, though there is evidence of smaller demand than the previous week's sale. The SEC's short-selling restrictions take effect.

Fannie Mae gains more than 5 percent. Freddie Mac falls more than 4 percent.

July 23 -- The House of Representatives approves a housing market support package including a mandate for the U.S. Treasury to provide equity or debt to Fannie Mae and Freddie Mac. The White House drops opposition to other measures in the broad housing bill and pledges to sign it into law.

Fannie Mae shares rise almost 12 percent to $15, their highest close since July 9. Freddie closes up more than 11 percent at $10.80, its highest close since July 8.

July 25 -- U.S. Senate approves the housing market bill by a 72-13 vote and it is sent on to the White House to be signed into law.