According to a survey of economists and housing experts, The New York Times is predicting the the losses in the housing market could be much greater than is currently expected. The paper says that, "at this juncture, economists say the troubles in the mortgage market could, all told, cost financial firms and investors up to $400 billion."

It is a hair-raising prediction.

A Congressional committee will report today that there will be two million foreclosures of subprime loans by the end of next year. That would wipe out $71 billion in real estate value all by itself.

The Times says that Global Insight, a research firm, predicts that the national average for housing prices will drop 5% over the next year and 10% before mid-2009, for a total of about $2 trillion.

The figures are also an indication that the financial crisis at commercial and investment banks could get worse as they are forced to write down more assets on their balance sheets. It certainly means there is a good chance that quarterly results from firms like Merrill Lynch (NYSE: MER) could be affected well into 2008.

It is a mess and it may be getting much, much worse.

Douglas A. McIntyre is an editor at 247wallst.com.