Conservatorship versus Receivership

Now we'll know the difference!

Fannie and Freddie are heading to the altar of conservatorship, and according to the Washington Post, it will be like this:

The value of the companies' common stock would be diluted but not wiped out, while the holdings of other securities, including company debt and preferred shares might be protected by the government.

Instead of giving each company a big capital infusion upfront, the government could make quarterly injections as the companies' losses warrant, the sources said. This would be an attempt to minimize the initial cost of the rescue.
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/05/AR2008090503351.html

But the NY Times sees it differently:

The executives were told that, under the plan, they and their boards would be replaced and shareholders would be virtually wiped out, but that the companies would be able to continue functioning with the government generally standing behind their debt, people briefed on the discussions said.

Under a conservatorship, the common and preferred shares of Fannie and Freddie would be reduced to little or nothing, and any losses on mortgages they own or guarantee could be paid by taxpayers.
http://www.nytimes.com/2008/09/06/business/06fannie.html?_r=1&hp&oref=slogin