S&P: Losses from Subprime Mortgage Securities Could Exceed $265 Billion

New York–As U.S. regional banks, credit unions and global financial institutions write down the value of their holdings, deficits from subprime mortgage-related securities could total more than $265 billion, according to Standard & Poor’s.The New York-based ratings agency put $534 billion of bonds and collateralized debt obligations connected with subprime home loans on review Wednesday, Bloomberg reports.In addition, Moody’s Investors Service said Thursday that losses from mortgages packaged into bonds in 2006 likely will be between 14 and 18 percent.Banks and securities firms including Citigroup Inc. and Merrill Lynch & Co. have comprised most of the $90 billion in writedowns thus far; however, S&P predicts regional U.S., Asian and certain large European banks may feel the effects of the subprime crisis next. Nearly half of the subprime bonds S&P rated in 2006 and early 2007 have been eliminated or put on review, causing credit unions such as Fannie Mae, Freddie Mac and the dozen Federal Home Loan Banks to write down holdings.