By Robert Carry
The number of US homes in the foreclosure process has yet to peak, the head of JPMorgan Chase & Co's mortgage unit has claimed.
Despite indications that the country's economy is beginning to recover from the global financial crisis, David Lowman has predicted that the number of American mortgage holders who will ultimately find themselves unable to make repayments will continue to rise. Lowman added that the issue will "weigh on us for some time to come".
According to recent media reports, analysts from New York-based Amherst Securities Group LP recently initiated an inventory of defaulting mortgages. The study revealed that some seven million properties are either currently in the foreclosure process or are likely to be seized. Experts believe that the figure, an increase of 1.27 million in 2005, will mean house prices will continue to fall.
Analysts from industry information provider Standard & Poor have revealed that some US$400bn worth of mortgages, which are defaulting after being put into securities by various companies not including government-backed Fannie Mae and Freddie Mac, are in default and could be foreclosed on.