Bear says mortgage funds are near worthless

by

Bear Stearns on Tuesday told clients that its two troubled mortgage hedge funds are basically worthless after losing billions of dollars on subprime mortgage bets.

In a letter to investors, Bear wrote that its High Grade Structured Credit Strategies Enhanced Leverage Fund had “effectively no value left” and that its High Grade Structured Credit Strategies had “very little value left” as of June 30.

The firm noted that the High Grade Fund does have enough remaining value to pay back the $1.6 billion in emergency funding provided by its parent bank. “At this time, approximately $1.4 billion remains outstanding on