Beset by widespread speculation about their losses, mortgage giants Fannie Mae and Freddie Mac defended their solvency yesterday.

Freddie shares plunged 22 percent, and Fannie fell 13.8 percent, in part because former St. Louis Federal Reserve Bank president William Poole told Bloomberg News the mortgage giants were technically insolvent. In addition, The Wall Street Journal, citing unnamed sources, said federal officials have been discussing options if Fannie and Freddie get into deeper trouble.

Freddie Mac rebutted Poole in a statement: "Freddie Mac has maintained the highest possible capital rating. The company continues to hold a surplus above its regulatory requirement that will enable it to continue to support the nation's housing markets."

Likewise, Fannie Mae managing director Brian Faith defended the adequacy of his company's capital. Faith said Fannie's core capital on March 31 totaled $42.7 billion, or $11.3 billion more than its minimum requirement.

The companies, which are chartered by the government, buy mortgages for their own portfolios or to package for sale to investors, thereby providing liquidity for home financing.

Standard & Poor's echoed Wall Street's dim view. "We remain concerned by thin capital levels," Kevin Cole, an S&P analyst, said in a research note. He said it would be tough for the companies to raise more capital and that further housing declines will also hurt the company.

Government officials came to the companies' defense. James Lockhart, the companies' chief regulator as director of the Office of Federal Housing Enterprise Oversight, said the companies "are adequately capitalized, holding capital well in excess of the OFHEO-directed requirement."