Financial Roundup: Total Bank Losses to $3.6 Trillion, Mortgage Lender Breaks, Half of CDOs in Default

(MoneyWatch)  U.S. banking losses could be $3.6 trillion -- Nouriel Roubini, the New York University business professor who accurately predicted the meltdown, now says that the total losses on loans and market value declines is $3.6 trillion. His earlier estimate had been $2 trillion. Roubini thinks the government needs to nationalize insolvent banks. [Source: GlobalEconMonitor]

Obama may subsidize mortgage lenders -- Lenders who cut interest rates on mortgages could find themselves getting special breaks. The Obama admininstration could propose letting bankruptcy judges change mortgage terms and offering special legal protection to lenders who modify loans. [Source: The Washington Post]
Nearly half of all CDOs have defaulted -- Complex debt products known as collateralized debt obligations (CDOs) are building a woeful record. Nearly half have defaulted and the number could grow to two thirds. [Source: FT.com]

Panel formed to suggest better regulation -- The Chartered Financial Analyst Institute and the Council of Institutional Investors have set up a panel to explore better ways of financial regulation. Heading it are former SEC chairmen William Donaldson and Arthur Levitt Jr. [Source: Council of Institutional Investors]
D.C.-area community banks in merger -- Independent Federal Savings Bank of Washington is buying Colombo Bancshares of Rockville, Md. for $168 million. [Source: American Banker]

Housing prices still falling -- Home prices fell in nearly nine out of 10 U.S. cities in the fourth quarter. The National Association of Realtors say that median prices of existing homes sank in 134 out of 153 metro areas, with Ft. Myers, Fla. showing the biggest drop. [Source: The Salt Lake Tribune]