NEW YORK (Reuters) - Freddie Mac, the No. 2 U.S. mortgage finance company, said Wednesday it expects to restate earnings for the years 2000, 2001 and 2002 upward by between $1.5 billion and $4.5 billion.

Previous reports had estimated the restatement would be in the $1 billion to $3 billion range.

Shares of Freddie Mac (FRE: Research, Estimates) rose 97 cents to $51.00 in before-hours trading Wednesday.

The McLean, Va.-based company said in January it would restate earnings going back as far as 2000. It fired Chief Operating Officer David Glenn earlier this month in connection with an internal probe.

"The information we are disclosing today reflects poorly on Freddie Mac's past accounting, control and disclosure practices," CEO Greg Parseghian said in a statement. "Management is aggressively addressing these issues."

The company has scheduled a Wednesday conference call with new Chairman Shaun O'Malley, CEO Parseghian and Chief Financial Officer Martin Baumann.

Freddie Mac said it will make public a review of its restatement by an outside counsel some time in July.

The firm said accounting policy changes it is adopting as a result of the review are likely to result in greater future volatility in its financial statements. At the same time, the company said the new accounting methods will not affect its ability to securitize mortgages or manage risk.

Freddie Mac is a shareholder-owned, congressionally chartered company that buys mortgages from lenders, and either repackages them as securities for investors or holds them in its own portfolio.

Federal prosecutors and regulators have launched investigations into the practices behind the restatement.