Updated from Sept. 5 at 5:23 p.m. EDT

The chairman of the House Financial Services Committee confirmed Saturday that the U.S. Treasury is planning a government intervention to back troubled mortgage giants

Fannie Mae

(FNM)

and

Freddie Mac

(FRE)

.

Rep. Barney Frank (D., Mass.) said Treasury Secretary Henry Paulson "intends to use the powers that Congress provided it" in a law passed in July to keep Fannie Mae and Freddie Mac stable and functioning,

The Wall Street Journal

reported Saturday afternoon. Frank said he didn't "know the details of the proposed interventions," the

Journal

reported.

A government shakeup and takeover of Fannie and Freddie is expected to come Sunday afternoon. The

Journal

reported late Friday that high-level talks between Paulson,

Federal Reserve

Chairman Ben Bernanke, Fannie Mae CEO Daniel Mudd, Freddie Mac CEO Richard Syron and the companies' new regulator, the Federal Housing Finance Agency, were under way.

While the

Journal

did not disclose details of the plan in its initial report after Friday's market close, it said it would involve use of the Treasury's new powers to inject capital in the companies, approved by Congress earlier this year. It also would include changes to management at both companies. Fannie Mae last month

shuffled three top executives

, but not Mudd.

Shares of the two government-sponsored mortgage giants have been volatile in trading over the past few months, as traders reacted to rumors and speculation over whether a government bailout was imminent -- a development that would likely wipe out shareholders.

Fannie Mae shares closed up 9.7% at $7.04 Friday, while Freddie Mac shares finished up 3% at $5.10. In after-hours trading Friday, Fannie fell 21.9% to $5.50 and Freddie sank 20.8% to $4.04.

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This article was written by a staff member of TheStreet.com.