Even a few weeks ago, such doomsday talk would have seemed out of place concerning the GSEs. However events of the last week have left the CRE industry feeling whipsawed as they watched the two agencies lose almost half of their market value.

There was not one definitive piece of news that sent the stocks tumbling, Frederic Ruffy, the senior options strategist at WhatsTrading.com, a New York City-based provider of options market analysis, told GlobeSt.com--also prior to the weekend news. Rather it was a series of events that chipped away--quite rapidly--at the market's already shaky confidence in their stocks.

The GSEs' woes began early in the week on reports that a new accounting change to an FASB rule would potentially require the two companies to raise more capital--a rule that could force them to bring off balance sheet assets back to the balance sheet, Ruffy says. Then, on Wednesday, shares fell again on news Fannie had paid record amounts in a sale of two-year notes. On Thursday, the slide gathered momentum after it was reported that the government regulators were in talks about what to do if Fannie and Freddie faltered. Comments from Federal Reserve President Poole, who said the two companies could be "insolvent", didn't help either, Ruffy says.

By Friday events had snowballed to rumors of a government bailout and that afternoon Treasury Secretary Henry Paulson issued a statement of support for the GSEs. "We are maintaining a dialogue with regulators and with the companies. OFHEO will continue to work with the companies as they take the steps necessary to allow them to continue to perform their important public mission," he said in prepared comments.

The GSEs as well have issued statements about their financial situation. "As our regulator has stated, and has reiterated in public statements this week, we are adequately capitalized," Brian Faith, managing director, Communications at Fannie Mae, said in a statement emailed to GlobeSt.com. "Our company has raised more than $14 billion in capital since November 2007, including $7.4 billion, most recently in May. Our core capital position on March 31, prior to the May capital raise, was $42.7 billion, $11.3 billion more than our statutory minimum requirement."

Fannie Mae's priority remains to maintain stable, liquid operations of the secondary mortgage market so that homeowners can continue to access affordable mortgage credit, he continued. "The downturn in the mortgage and housing markets has demonstrated the critical role Fannie Mae plays in providing liquidity and stability to the housing finance system. We are managing our business and maintaining a capital position that will allow us to fulfill our congressionally chartered mission now and in the future."

These statements have become almost mandatory by this point; rumors of a government conservatorship rattled the market like no other event of the week, Ruffy says, as such an event "would probably result in the equities being worth very little or nothing." Which brings us to this week. How the market reacts--and Fannie and Freddie's approach to multifamily finance in the medium term--will depend a great deal on what plan Treasury is now expected to put forth.

The government has already stepped in to loosen regulations at Fannie and Freddie, Shapiro notes, pointing to the Office of Federal Housing Enterprise Oversight's decision in March to scale back the capital surplus requirements for Fannie Mae and Freddie Mac to 20% from their former level of 30%. At that time, the agency did it to jump start lending in the face of a crunch. "Now, they would step in to address a problem," he says.

While many in the CRE industry are worried, a wait-and-see stance trumps any action right now. "It is too early to predict what will happen," Seth Wolkov, vice president at Madison Capital, tells GlobeSt.com. "I couldn't begin to say how these events will affect their ability to make and buy loans."

Part of the problem for the multifamily sector is that Fannie and Freddie were pricing their loans so aggressively, Ryan Krauch, principal with Mesa West Capital in Los Angeles, tells GlobeSt.com. That, plus the fact that a number of private sector lenders have already been sidelined for the year, will make it hard for the private lending sector to fill in any gap left by the GSEs, he says. The good news, though, is that Fannie and Freddie primarily concentrated on stabilized assets, which are easier to finance.

Scott Singer, EVP of the Singer & Bassuk Organization in New York, adds the commercial lending market may pleasantly surprise developers. "Sure Fannie and Freddie area big fish--but there are still a lot of other commercial big fishes." Pricing may have been extremely attractive lately, but there have been times when the GSEs were more expensive than the market, he tells GlobeSt.com. "So while it is never a positive to see a significant segment of the market pull back, if in fact that is what will happen, that is all they are--just one segment of the market."