Regional banks will experience a huge increase in the number of homeowners willing to simply walk away from their mortgage loans, and 30 percent of these banks could fail as a result, says
"The housing recession is not bottoming out by any standard. The problem is actually getting worse."
Because the number of homes that are worth less than the mortgages their owners are carrying is growing, the number of homeowners who default on their mortgage loans is increasing, and consequently, so are banks' balance sheet woes.
Someone, Roubini points out, will have to finance the bailout of the teetering regional banks, and those bailouts will add hundreds of billions of dollars to an already gargantuan federal debt.
"Our biggest financiers are
Roubini, who forecast the credit and housing crisis some two years ago, believes that banks will have to write off at least $1 trillion of losses before this debacle ends.This means that banks will have to write off $600 billion in addition to the more than $350 billion they've already written off.