EL MIRAGE, Ariz. The nation's biggest banks and mortgage lenders have steadily amassed real estate empires, acquiring a glut of foreclosed homes that threatens to deepen the housing slump and create a further drag on the economic recovery.

All told, they own more than 872,000 homes as a result of the groundswell in foreclosures, almost twice as many as when the financial crisis began in 2007, according to RealtyTrac, a real estate data provider. In addition, they are in the process of foreclosing on an additional one million homes and are poised to take possession of several million more in the years ahead.

Five years after the housing market started teetering, economists now worry that the rise in lender-owned homes could create another vicious circle, in which the growing inventory of distressed property further depresses home values and leads to even more distressed sales. With the spring home-selling season under way, real estate prices have been declining across the country in recent months.

"It remains a heavy weight on the banking system," said Mark Zandi, the chief economist of Moody's Analytics. "Housing prices are falling, and they are going to fall some more."

Over all, economists project that it would take about three years for lenders to sell their backlog of foreclosed homes. As a result, home values nationally could fall 5 percent by the end of 2011, according to Moody's, and rise only modestly over the following year. Regions that were hardest hit by the housing collapse and recession could take even longer to recover - dealing yet another blow to a still-struggling economy.

Although sales have picked up a bit in the last few weeks, banks and other lenders remain overwhelmed by the wave of foreclosures.

In Atlanta, lenders are repossessing eight homes for each distressed home they sell, according to March data from RealtyTrac. In once-hot markets like Chicago and Miami, the ratio still hovers close to two to one.

Before the housing implosion, the inflow and outflow figures were typically one-to-one.

The reasons for the backlog include inadequate staffs and delays imposed by the lenders because of investigations into foreclosure practices. The pileup could lead to $40 billion in additional losses for banks and other lenders, according to Trepp, a real estate research firm.

"These shops are under siege; it's just a tsunami of stuff coming in," said Taj Bindra, who oversaw Washington Mutual's servicing unit from 2004 to 2006 and now advises financial institutions on risk management. "Lenders have a strong incentive to clear out inventory in a controlled and timely manner, but if you had problems on the front end of the foreclosure process, it should be no surprise you are having problems on the back end."

The major lenders say they are not deliberately holding back any foreclosed homes. They say that a long sales process can stigmatize a property and ratchet up maintenance and other costs. But they also do not want to unload properties in a fire sale.

"If we are out there undercutting prices, we are contributing to the downward spiral in market values," said Eric Will, who oversees distressed home sales for Freddie Mac. "We want to make sure we are helping stabilize communities."