Freddie Mac and Fannie Mae are American household names and were created decades ago to foster affordability and stability in the US housing market.

Together, they guarantee around $US6 trillion in outstanding home loans. But with 50 million mortgage customers, the two government-backed companies are weathering the lion’s shares of the subprime mortgage crisis.

So comments from a former Federal Reserve president, William Poole, that the pair might need bailing out, rocked confidence in an already troubled sector.