We have seen $90 billion of writedowns to date. Standard and Poor’s is saying that you can super size that order. Writedowns total losses are expected to be $265 billion or more.

So far, Wall Street has been shouldering the brunt of the losses. S&P says the next losses will affect smaller financial institutions including regional banks in the U.S., credit unions, and lenders in Europe and Asia.

Just yesterday, UBS, the biggest Swiss bank, wrote down $14 billion of assets.

Bush Praises Subprime Mortgage Strategy

President Bush says it is “going to take a while to work through this mortgage bubble,” but that his administration does have a strategy for helping subprime borrowers refinance or restructure their mortgages.

Bush said in a speech on the economy that the Treasury Department has worked with mortgage servicers so borrowers don’t “get pinched as their interest rates reset”. He also noted that the Federal Housing Administration is helping to refinance subprime borrowers and could do more if Congress passes an FHA modernization bill. (The Senate just passed such a bill, which now has to be reconciled with the House version).

Former Federal Reserve Board Chairman Alan Greenspan has suggested that the federal government could provide cash assistance for distressed homeowners who can’t afford their mortgage payments.

Mr. Bush stressed in his speech that he is against bailouts for lenders, speculators, and people who bought a house they couldn’t afford. “But we can mitigate some of the issues, and I’m concerned about people who are credit worthy enough to live in their homes not being able to deal with these resets,” he said.

Federal Reserve To Revise Home Ownership and Equity Protection Act

The Federal Reserve Board will meet Dec. 18 to issue long-awaited revisions to its Home Ownership and Equity Protection Act regulations that address abuses associated with the subprime mortgage industry.

The proposed HOEPA rule will address prepayment penalties, failure to escrow taxes and insurance, stated income and low documentation lending, and ability to-repay standards.

In a letter to the Fed, 17 Democrats on the Senate Banking Committee urged the Fed to act “forcefully” to protect consumers.

“We appreciate the fact that the Board is moving forward with a rule making under HOEPA, and expect the Board to meet the duty Congress entrusted to it to end the abusive practices … that have undermined confidence in the subprime mortgage market and the economy as a whole,” the Dec. 7 letter says.

Subprime Crack For Homeowners

Innovation Outstripped The Subprime Regulation

Subprime Mortgages Subprime mortgage losses may not peak until 2010.

Center For Responsible Lending Warns About Nearby Subprime Mortgage Foreclosures

Over 44 million homeowners could see the value of their properties decline by an average of $5,000 due to a nearby subprime foreclosure, according to a new study by the Center of Responsible Lending.

“The total decline in house values and tax base from nearby foreclosures will be $223 billion,” the CRL issue paper says.

CRL advocacy group warns that minority communities with large concentrations of subprime borrowers could experience more severe declines in property values. The CRL report is based on an academic study that found one foreclosure in a neighborhood could reduce surrounding property values by 0.9%.

It is also based on CRL projections that 19.4% of subprime mortgages originated in 2005 and 2006 will end up in foreclosure and that 1.1 million borrowers will lose their homes. “By any measure, the epidemic of home losses is severe, and will not only harm families who lose their homes, but also nearby homeowners who suffer drops in their property values“, the CRL paper concludes.

The group supports legislation that would allow bankruptcy judges to restructure mortgages.

Citigroup Restructuring. Richard Stuckey to head subprime mortgage portfolio group.

Charles Prince pay package valued at $60 million in stock and retirement benefits. Citigroup will soon file a report with the SEC on the exit package.

The tentacles of the subprime mortgage monster. We will look at the threat in the broader economy.