Details of a plan that could lead to a government takeover of Fannie Mae and Freddie Mac are expected to be announced Sunday.

The Treasury Department and the mortgage financing company's regulator, the Federal Housing Finance Agency have called a press conference for 11 am New York time.

While details of the plan could not be confirmed, these people point out that Treasury Secretary Hank Paulson has in the past insisted that shareholders, including common and preferred shareholders, pay the ultimate price in absorbing losses. That would suggest both classes of shareholders could be wiped out or severely diluted in a reorganization plan.

The plan will not preserve Fannie and Freddie in their current form as government officials believe that no amount of public funds would be sufficient to restore investor confidence.

It remained unclear how much the plan would cost taxpayers.

The two government sponsored enterprises (GSEs) own or guarantee almost half of the country's $12 trillion in outstanding home mortgage debt.

The Wall Street Journal reported earlier on Friday that the U.S. Treasury Department is close to finalizing a plan to restructure the two companies that includes changes to their

senior management.

U.S. Treasury spokeswoman Brookly McLaughlin declined to comment on the Journal report on Friday. Fannie Mae and Freddie Mac spokesmen also declined to comment. The Federal Reserve, which earlier this year gave both companies the right to borrow from its discount window if necessary, declined comment also.

The two firms would be placed in "conservatorship", the Washington Post said, citing sources familiar with the discussions.

Shortly after the Journal report on Friday, Pimco's Bill Gross told CNBC that he welcomed the potential for government intervention.

"To the extent that it does happen, it's a needed step," said Gross. (See the entire interview with Gross in the accompanying video.)