WASHINGTON - The chief executive officers of Fannie Mae and Freddie Mac said yesterday that their ailing mortgage-finance companies would suffer further in 2008 because of a weakening housing market and rising home-loan defaults.

Freddie's CEO, Richard Syron, said the government-sponsored firm could lose an additional $5.5 billion to $7.5 billion over the next few years from soured home loans.

"I honestly think it's going to get tougher before it gets better," Syron said in a discussion with financial analysts in New York. His company has already logged about $4.5 billion in projected losses during the first nine months of this year.

Freddie's shares fell $3.73, or 10.64 percent, to close at $31.31.

Fannie CEO Daniel Mudd, also meeting with analysts at the conference, forecast "a very tough 2008" and continued weakness in home prices through 2009. Mudd called the wave of defaults and foreclosures this year the worst mortgage crisis "in recent memory."

The Washington-based company, which lost $1.4 billion in the third quarter, sold $7 billion in preferred stock last week to raise capital to stabilize its finances. Mudd said yesterday that Fannie had no further plans for such sales over the next year.

He said the company could raise additional capital, however, through sales of mortgage-investment holdings, increased fees on mortgages, and other measures.

Fannie and Freddie, which together own or guarantee around two-fifths of U.S. home-mortgage debt, have cut their dividends and sold billions of dollars of special stock recently to buttress their finances after posting stunning third-quarter losses.

Shares of Fannie, the No. 1 financer and guarantor of U.S. home loans, fell $2.62, or 7.10 percent, to close at $34.29.

The two companies traditionally have been a major source of funding for the home-loan market by buying mortgages made by banks and other lenders and then bundling them as securities for sale to investors.

Freddie lost $2 billion in the third quarter, and Syron said yesterday that results were not expected to be any better in the October-to-December quarter.

"We've reported really ugly numbers, let's face it," Syron said in the meeting with analysts.