UPDATE 1-JP Morgan sees rate reset, refi problems looming

(Adds rating cut forecast in fourth paragraph)

NEW YORK, July 20 (Reuters) - Many U.S. homeowners will have more problems as troubled loans reset at higher rates and it becomes more difficult to refinance over the next 18 months, J.P. Morgan Chase & Co. JPM.N. said on Friday.

"We are really heading into the reset storm," said J.P. Morgan analyst Chris Flanagan. "We are on the cusp of that."

Flanagan, J.P. Morgan's global head of asset-backed securities and collateralized debt obligation research, spoke during a conference call with clients on Friday.

Flanagan also forecast more rating downgrades of ABS and ABS CDOs over the next six to 12 months.

Standard & Poor's on Thursday cut ratings on portions of 75 ABS CDOs that affected almost $2 billion of debt, which make up less than 1 percent of about $250 billion of synthetic CDOs rated by S&P.

The cuts on Thursday also included 10 CDO tranches that were cut to junk from investment-grade status.