CNBC published an article that suggests Citigroup's exposure to the foreclosure fiasco may be more than commonly thought. By making some assumptions about how the bank acquired its portfolio of mortgages it services but does not own and some assumptions about the rate at which those mortgages default, CNBC came up with exposure estimates.

At a 60 percent defect rate to loans acquired via other lenders, it gets a repurchase exposure of about $37 billion. At a 80 percent defect rate, the bond repurchase exposure rises to $43 billion. Citi's repurchase reserve stands at $952 million.

CNBC notes the bank's response: "Citi outlined the claims and repurchases in its servicing not-held portfolio in its third quarter analyst presentation. Compared to the roughly 2.5 million unindemnified remaining in our servicing portfolio, we've received only 17,500 claims in total, of which approximately half have been repurchased or made whole. There is absolutely zero factual basis for CNBC's figure."

It all comes down to the rate at which these mortgages will blow up. Hopefully, these estimates are on the high side, but we just do not know.

For more:
- here's the article

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