For all of the talk that the real estate market in some of the nation's hardest hit areas may be nearing a bottom -- much of it coming from the National Association of Realtors -- most industry insiders and banking experts that have spoken with HW have suggested that most markets have much further to fall. In a slide provided to investors late last night during a conference call covering its acquisition of Washington Mutual (WM), JP Morgan Chase & Co. (JPM) clearly believes that there is further to fall in two key states, as well as nationwide -- and potentially much further to fall, depending on economic conditions. The firm said it current expects home prices nationwide to fall another 8 percent from current levels, assuming unemployment of 7 percent; its estimates for California and Florida, however, were more severe. JP Morgan said that its base-case suggests another 10 percent in price declines in California, while prices in Florida may fall another 16 percent. The expectations for a further drop translate into a 25 percent peak-to-trough drop in prices nationwide; prices in California and Florida will have fallen 44 percent in such a scenario, the company suggested. Should unemployment reach 8 percent -- the scenario for a severe recession, under JP Morgan's estimation -- those price declines would be much worse. In such a case, California could see home prices fall another 24 percent from current levels, while Florida would drop 36 percent and nationally home prices would fall 20 percent from where they are currently. Such a worst-case scenario would drive an extra $54 billion in losses in the WaMu loan portfolio, were it to pass. Lawmakers are working frantically on a proposal to bail out the nation's frozen financial markets, which have become unhinged in the wake of contagion from the mortgages; President Bush warned on Wednesday that a severe recession may be in the offing if lawmakers fail to act quickly. Discussions around a Treasury-led proposal that would see the government buy some of the most illiquid mortgage-related securities and distressed loans took a turn off course Thursday night, after a group of House Republicans proposed a separate bailout package. Bush told the press on Friday that while opinions differ on details, nearly all agree that something must be done. Click here for the full JP Morgan investor presentation >> Disclosure: The author held no relevant positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.