UPDATE 1-Gross: GSE shares reflect gov't bailout likely-CNBC

(Recasts lead paragraph, adds quotes and details on Fannie, Freddie)

NEW YORK, Aug 20 (Reuters) - Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac's (FRE.N: Quote, Profile, Research, Stock Buzz) depressed shares reflect the likelihood that the U.S. Treasury will bail out the giant mortgage-finance companies, wiping out shareholders, Bill Gross, chief investment officer of Pimco or Pacific Investment Management, told CNBC television on Wednesday.

"You know at $3 or $4 dollars per share...in effect, the market is valuing both of these companies at zero," Gross, who manages the $130 billion Pimco Total Return fund.

Investors still face hundreds of billions of dollars of losses if U.S. house prices decline by another 10 to 15 percent, Gross said.

The U.S. Treasury will probably be forced to buy a minimum of $15-20 billion of preferred shares in each Fannie and Freddie to help shore up their capital, he said.

(Reporting by Jennifer Ablan and John Parry;)