Standard & Poor's Monday boosted its expectations for losses on risky loans backing U.S. mortgage securities to as much as 40 percent, suggesting a darkened outlook for the troubled housing market.
The more dire assessment will likely "significantly impact" bonds originally carrying AAA ratings, S&P said in a report.
Increased assumptions for total losses on subprime and Alt-A residential mortgage-backed securities come amid declines in market value of the debt and a surge in the inventory of bank-owned properties, S&P said.
S&P boosted loss projections for subprime loans made at the peak of the market in 2006 and 2007 to 32 percent and 40 percent from 25 percent and 31 percent, respectively.
For 2005 loans, loss projections rose to 14 percent from 10.5 percent.
SOURCE: REUTERS VIA CNBC
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