Reply #18: Banks May Face $97 Billion Loss From Mortgage Mess

[Demeter]

http://www.cnbc.com/id/39870708

...The specialists—representatives from law firms and mortgage backed securities traders—told a gathering of prominent hedge funds in New York Wednesday that a wave of so-called putbacks was coming from these problematic home loans.

Putbacks occur when investors in mortgage-backed securities return individual home loans whose nature or handling violated their original terms to the companies who issued them—forcing those issuers to repurchase the loans at par...

...Although many home lenders and securities packagers who trafficked in MBS during the mid-2000s are now defunct, some were absorbed by large banks like J.P. Morgan and Bank of America , potentially exposing those companies to investor payouts.

The liabilities have been hard to pin down, with one J.P. Morgan survey pegging the total industry losses at between $55 billion and $120 billion...

PICK A NUMBER, ANY NUMBER---AND I'LL BET YOU IT WILL BE EVEN HIGHER THAN THAT