We've seen a wide range of estimates when it comes to the ultimate costs to banks of potential mortgage putbacks. On the high side: in a stressed environment, the costs of putbacks from GSEs, non-agency mortgage bond investors and holders of second liens and home-equity lines could hit as high as $120 billion over several years, according JPMorgan. The actual costs will likely end up a lot lower.

Standard & Poor's has released a new loss estimate of $43 million for the top six banks between now and 2012. Of that amount, the credit rater reckons banks have reserved for about $12.4 billion, which leaves about $31 billion of possible losses for Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, U.S. Bancorp and PNC. Note that this analysis leaves out Ally. Bank of America and JPMorgan Chase are the most exposed.

This is not seen as a balance sheet issue, however, but could be a significant income statement issue. Capital raises will not be necessitated. Also, for the most part, the firm sees putbacks as a warranty and misrepresentation issue.

Robo-signing and other documentary problems are seen as a separate concern that will not likely result in putbacks. But these problems may cause a delay in the foreclosure process that could result in higher losses when the home is finally sold.

For more:
- here's an item from Housing Wire

Related Articles:
Perhaps the threat of foreclosure litigation is overblown
How costly is the foreclosure mess for banks
Fed moves against Bank of America in foreclosure mess