"Housing prices won't hit bottom until next summer and the losses won't peak for another two years, until 2009," said David Wyss, chief economist of Standard & Poor's.

The recession is foreseen to last at least another two years, pulling further down the American economy. "We are not halfway through this crisis yet." Wyss added.

S&P forecasts the U.S. economy will grow 2 percent in 2007 and in 2008, while the global economy is expected to grow 3.6 percent and 3.5 percent, respectively.

The comments came as Thornburg Mortgage, another mortgage company, surrendered to the beating of collapsing mortgages, saying it has lost $1.1 billion, 27 percent more than it had expected.

The company focuses on providing jumbo loans, which is above $417,000, to buyers of more expensive homes. Its losses came when it tried to sell bonds supported by adjustable-rate mortgages that were increasingly falling into default.

Thornburg’s president and chief operating officer, Larry Goldstone said. "The global dislocation of the mortgage finance and credit markets this past summer has had a greater impact on our balance sheet than we initially estimated,"

The U.S. Federal Reserve estimated the credit losses resulting from the U.S. subprime crisis are about $150 billion, less than 1 percent of the $16 trillion U.S. mortgage market.

Sales of U.S. agency backed mortgage securities rose 5 percent in September to $103 billion, reflecting the growing popularity of fixed-rate mortgages.