Could 500 Billion turn into a Trillion Dollars in Write Downs?

By MarketSpecialist • July 28, 2008

With all the financial turmoil our economy is facing right now it is no surprise that there has already been 500 billion dollars in losses and asset write downs by our financial institutions. According to Money Morning, this is forecasted to continue with an expected total of 1 TRILLION dollars in write downs! With so many people waiting on the sidelines to buy, it is not a far stretched theory. Some feel that there is hope with the new bill that the US House of Representatives just passed:

Allowing the government to insure up to $300 billion in refinanced mortgages.

Establishing a tax break of as much as $7,500 for first-time homebuyers

And creating a new regulator to oversee government-sponsored enterprises Fannie and Freddie.

Though this may help, with 25 million homes in risk of entering into negative equity, there is no denying that there will be more write downs and losses to come resulting in tighter lending and downward pressure on market conditions.

Read the full article on Morning Money.

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