Financial stocks may rise on Monday after the U.S. government took over troubled mortgage companies Fannie Mae <FNM.N> and Freddie Mac <FRE.N>, but this may be only a temporary reprieve given the long list of woes banks are currently battling.

By Elinor Comlay

Sovereign Bancorp Inc.'s stock rebounded Thursday as shares of government-backed mortgage finance companies Fannie Mae and Freddie Mac rose for the fourth straight session.

Among the stock activity stories for Thursday, Aug. 28, from AP Financial News:

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Mortgage finance giant Fannie Mae shook up its executive ranks Wednesday, after shares in it and sibling company Freddie Mac rose for a third straight day as investors appeared less certain a government bailout of the two troubled companies is imminent.

A Friedman, Billings, Ramsey & Co. analyst on Wednesday said Sovereign Bancorp Inc. is among the banks in his coverage area with the most preferred equity exposure in Fannie Mae and Freddie Mac.

U.S. thrifts lost $5.4 billion in the second quarter and set aside a record amount to cover losses from bad mortgages and other loans.

Some regional banks with substantial holdings in Fannie Mae and Freddie Mac preferred stock could suffer from the uncertainty over the mortgage finance giants' fate and the possibility that the government will rescue them, an analyst said Monday.