NEW YORK (Bloomberg) - Fannie Mae and Freddie Mac, the mortgage firms 85 percent owned by US taxpayers, plunged more than 50 percent after regulators told them to delist their common and preferred stock from the New York Stock Exchange.

The Federal Housing Finance Agency (FHFA), which has overseen the two companies since 2008, ordered the moves as a preemptive step after the New York Stock Exchange told Washington-based Fannie Mae that its shares no longer met listing standards, FHFA acting director Edward DeMarco said yesterday.

"A voluntary delisting at this time simply makes sense and fits with the goal of a conservatorship to preserve and conserve assets," Mr. DeMarco said in the statement. The delistings are expected to be effective in early July, the companies said.

Fannie Mae and McLean, Virginia-based Freddie Mac, which own or guarantee more than half of the $11 trillion US mortgage market, have been at risk of delisting since September 2008, when they were taken over by regulators at the height of the credit crisis.

Shareholders include Vanguard Group, Blackrock Inc., Kinetics Asset Management, and California's state pension fund.

Shares of Fannie Mae fell 50 percent to 46 cents at 12.02 p.m. in New York Stock Exchange composite trading. Freddie Mac fell 52 percent to 59 cents.

The companies, which are expected to trade on the Over-the-Counter Bulletin Board, will file reports with the US Securities and Exchange Commission after the delisting, Mr. DeMarco said.

The US Treasury has injected $145 billion into the firms since 2008 to keep them solvent amid rising foreclosures and defaults of mortgages on their books.

Treasury Secretary Timothy Geithner has promised to support the companies while Congress weighs an overhaul of the nation's mortgage-finance system.

Total taxpayer aid could total hundreds of billions of dollars.

"The delisting is really symbolic," said David Kovacs, head of quantitative strategies at Berwyn, Pennsylvania-based Turner Investment Partners, which manages $19 billion.

"The equity value should've been wiped out a couple of years ago," Kovacs said.

Credit-rater Standard & Poors maintained its 12-month target price of $1.50 on shares in the two companies.

"The US government will continue to provide financial support" to the firms, S&P analyst Rafay Khalid said.

Since the government took control of the companies, their shares have hovered near the NYSE minimum 30-day rolling average closing price requirement of $1.

The NYSE notified Fannie Mae yesterday that the firm no longer met listing standards because its closing price fell below $1 for the past 30 days.

The decision to delist "does not constitute any reflection on either enterprise's current performance or future direction, nor does delisting imply any other findings or determination on the part of FHFA as regulator or conservator," Mr. DeMarco said.

Taking steps to boost share prices, for example through a reverse split, would not have guaranteed that the companies would be able to maintain the minimum price level, he said.

With the delisting, "we lose some transparency into what is essentially a large black hole that is eating up a large part of our bailout funds", said David Lutz, managing director of equity trading at Stifel Nicolaus & Co. in Baltimore.