The interim rescue plan for Fannie Mae and Freddie Mac unveiled by the US Treasury last month is coming under severe strain in the market, putting pressure on the government to consider further intervention to help the mortgage financiers.

On Monday, shares in both government-sponsored enterprises (GSEs) plunged following a report in Barron’s magazine that the Treasury would inject capital in the form of preference shares on terms that punished existing investors if the firms failed to raise new equity.