Summary
The news is not good for UBS. The amount of mortgage holdings in US and Non-US declining markets will lead to further losses. 1. $45 B of additional US Mortgage Holdings. 2. An undisclosed amount of non-US mortgage holdings. 3. A UK and Eurpoean mortgage market that is going down as well. 4. The slump in home prices is not over and is impacting performing mortgages.
Analysis
UBS has not taken all of its mortgage losses yet, not by a long shot. With the holdings in US and non-US markets, the exposure is multi-fold. They have dropping values erroding the worth of currently performing loans and causing further losses. They have early delinquencies going further in default. The loss rate on defaults is going up and will go higher with the new Senate refinance plan.
All of the news would indicate that the losses will continue. A conservative estimate on the US holding alone would be another $2 to $8 B just from a roll rate analysis leading to loss. That does not include the losses on non-US mortgages.
