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by CareyBot

Losses on complex securities backed by mortgages will eventually exceed $265 billion, with losses spreading from Wall Street investment firms to regional banks, credit unions and Fannie Mae and Freddie Mac, Standard & Poor's Ratings Services said in a report. The rating agency announced Wednesday it was downgrading or placing on a list for possible downgrades $534 billion in mortgage-backed securities (MBS) and $264 billion in collateralized debt obligations (CDOs), Not all of the investments subject to downgrades may end up losing money, but Standard & Poor's is taking a more cautious stance, with economist David Wyss forecasting home-price declines of 13 percent by the end of the year, bottoming out no sooner than the first quarter of 2009, the Wall Street Journal re...