WRAPUP 6-U.S. seizes Fannie, Freddie, aims to calm markets

* U.S. government takes over Fannie Mae, Freddie Mac

* Move is aggressive bid to help battered housing market

* Regulator to operate companies; CEOs replaced

* U.S. stock futures jump, bonds fall on move (Adds Senate Banking panel chair to hold hearings on GSEs)

By Glenn Somerville

WASHINGTON, Sept 7 (Reuters) - The U.S. government on Sunday seized control of mortgage finance companies Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), launching what could be its biggest bailout ever in a bid to support the U.S. housing market and ward off more global financial market turbulence.

The action, prompted by worries over the companies' shrinking capital, was the latest in a series of emergency steps taken by U.S. officials to prop up the ailing housing market and quell what is now a year-long crisis in credit markets that has helped push many economies toward recession.

"Our economy and our markets will not recover until the bulk of this housing correction is behind us," U.S. Treasury Secretary Henry Paulson said in a statement read to reporters.

Fannie Mae and Freddie Mac, which own or guarantee almost half of the country's $12 trillion in outstanding home mortgage debt, were so large that "a failure of either of them would cause great turmoil in our financial markets here at home and around the globe," Paulson said.

The congressionally chartered companies, the two largest sources of U.S. housing finance, have suffered combined losses of nearly $14 billion in the last four quarters and large holders of their debt, including overseas central banks, have shown increasing nervousness over their health.

U.S. stock index futures NDc1 SPc1 DJc1 surged on Sunday evening, pointing to a sharp rise when Wall Street opens on Monday, showing the plan had shored up investor sentiment.

U.S. bond futures TYc1, however, tumbled as it raised concerns about additional debt the government might take on.

U.S. Treasuries prices fell sharply as the new trading week opened in Asia with benchmark 10-year yields <US10YT=RR> rising to 3.900 percent, up 19 basis points from Friday.

The U.S. dollar rose against the yen <JPY=> but slid against the euro <EUR=>.

The two government-sponsored enterprises, which are publicly traded but which serve a government mission to support housing, were put in a conservatorship that allows their stock to keep trading but puts common shareholders last in line in any claims.

The normal powers of the companies' directors and officers will be held by the conservator, their regulator, the Federal Housing Finance Agency, until the businesses are restored to "safe and solvent" financial health.  Continued...