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Mortgage finance giants Fannie Mae and Freddie Mac were ordered by their federal regulator to no longer trade their shares on the New York Stock Exchange, the agency announced Wednesday. Both stocks plummeted on the news.

The Federal Housing Finance Agency (FHFA) and its predecessor agency have overseen the operation of Fannie Mae and Freddie Mac since September 2008, when they were both placed under conservatorship, a form of control similar to what is found in a bankruptcy process.

Since that time, the Treasury Department has poured $83.6 billion into Fannie Mae and $61.3 billion into Freddie Mac to cover losses on the trillions of dollars worth of mortgage-backed securities they own or guarantee.

Billions of additional losses are forecast in coming years, with the Congressional Budget Office estimating that nearly $400 billion in tax dollars will eventually be needed. The government controls the majority of the shares of each firm.

The Obama administration has used the blank check that Congress authorized to bailout the firms in July of 2008 to try and help shore up the still weak U.S. housing market.

Fannie Mae and Freddie Mac remain a key source of funding for banks and other mortgage lenders. Without Fannie Mae and Freddie Mac, lending to home buyers would have completely dried up, home sales and new housing construction would have fallen even more sharply and homes would have lost even more value.

But while the money given to Fannie Mae and Freddie Mac helped put a floor under the U.S. housing market and overall economy, the two firms have continued to hemorrhage money.

The two firms posted combined losses of $93.6 billion in 2009 and another $18.2 billion in the first quarter. The Obama administration had said it would lay out its plan for their future at the start of this year, but has yet to do so.

FHFA said in a statement that the planned delisting is due to the weak stock price for both firms, and not due to any determination about a change in condition at the firms or decisions about their futures.

“A voluntary delisting at this time simply makes sense and fits with the goal of a conservatorship to preserve and conserve assets,” said FHFA’s acting director Edward DeMarco in the statement announcing the move.

Fannie Mae’s shares have hovered near the $1 level that is the minimum required by the NYSE since they were placed into conservatorship, while Freddie Mac’s shares have typically traded at less than $2.

Shares of Fannie Mae and Freddie Mac both plunged about 50% in late-morning trading. Fannie Mae fell to 45 cents, while Freddie Mac was trading at 61 cents. Each firms’ shares are eventually expected to trade publicly on the over-the-counter bulletin board, also known as pink sheet trading.

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Freddie Mac, the second largest provider of U.S. home mortgage funding, Friday posted its first quarterly profit in two years as gains from hedges and a one-time accounting change offset still-lofty credit losses.

For the first quarter in four, Freddie Mac said it would not need a capital injection from the Treasury to maintain its business of providing credit for U.S. housing. But it said it continues to rely on government money to keep it afloat.

Freddie Mac and larger rival Fannie Mae are seen as key barometers of the U.S. housing market, having expanded their scope as competitors fell during the financial crisis. Under government control since September, they are also being asked to do more for U.S. efforts to stabilize the shaky housing market, even though that is turning out to be a costly effort.

Together, the companies own or guarantee more than $5 trillion in U.S. mortgages.

“Our outlook remains cautious due to rising foreclosures, growing unemployment, tight lending standards, and buyers’ reluctance to reenter the market,” John Koskinen, Freddie Mac’s interim chief executive officer, said in a statement.

Freddie Mac reported second-quarter net income of $768 million, compared with a $9.9 billion loss in the first quarter and a $821 million deficit in the period a year ago.

After payments of $1.1 billion in preferred stock dividends to the U.S. Treasury, Freddie Mac had a net loss of 11 cents per diluted common share.

Freddie Mac said profit was cushioned by a $5.1 billion increase in equity due to the adoption of accounting rules that govern how it must recognize losses. It also had a $4.2 billion gain from derivatives that rose in value as interest rates rose, and greater interest income as its borrowing costs fell.

Provisions for credit losses declined to $5.2 billion in the second quarter from $8.8 billion in the previous period, driven by recent home price improvements, it said. But that benefit is likely seasonal, and provisions will probably rise again, it said.

Fannie Mae on Thursday reported a $14.8 billion quarterly net loss, and noted a “significant uncertainty” to its long-term health given the lingering housing crisis and costs taken to slow foreclosures.

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