Have you actually sold the mutual funds? If you haven't sold them, you can't take a deduction. If you have sold them, creating a "realized" loss, then you can deduct at least part of the loss. You can use the loss to offset any capital gains you had for the year, and also deduct an additional $3,000 in losses. The remainder of the losses will have to be carried over to future years and deducted then.
