Mortgage Losses Could Rack Up $300 Billion

The Organization for Economic Co-operation and Development said today that the overall losses from the mortgage crisis could rack up a bill of over 300 billion dollars.

Financial firms and policymakers need to buy time to ensure that this loss is orderly worked out. The OECD stated that the super fund set up by Citigroup, JPMorgan Chase, and Bank of America was one of the things designed to allow lenders to spread out their losses.  This fund came up on November 12th and is a 100 billion dollar fund designed to buy asset-backed securities of hurting special investment vehicles to prevent reduced prices at a fire sale on these assets. “The super special investment vehicle idea clearly does provide a mechanism that gives ‘time’ for all the stock adjustment prices to work through,” the OECD said in its latest Financial Markets Trends report. “Time is key to solving the turmoil.”

The Organization for Economic Co-operation and Development also stated that we have not hit the worst part of the resets, delinquencies, and losses on mortgages. With somewhere around 890 billion dollars in subprime mortgage rates reseting in 2008 it’s estimated that 125 billion of this will end up in losses due to foreclosures.

To read more about US related mortgage losses head on over to CNBC.