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Large Backlog Of Bank Owned Homes

Posted on December 22 By Justin McHood

According to USA Today, there were about 1.7 million homeowners who were far along in the foreclosure process in the fall - which means that there is a large bulge of homes that are going through the foreclosure process and will be available for sale from the banks in the spring and into 2010.

A year ago, there were 1.1 million - which means that that the number has risen substantially and many experts predict the number will rise through at least the middle of 2010.

According to Mark Fleming - the Chief Economist at First American / CoreLogic the foreclosure backlog is equal to about half half of the 3.8 million unsold new and existing homes currently on the market.

"We're going to be dealing with high levels of distressed (sales) in the marketplace for at least a couple of years," Fleming said. "It's not just all going to disappear."

The estimate from First American is fairly conservative - other reports estimate a higher number - but they have chosen to make some fairly conservative assumptions in their algorithms.

Regardless of exactly how big the number is exactly of the "shadow inventory" one thing is clear - there are still many more homes that are in the foreclosure process and with loan modifications not being as successful as many people hoped - homeowners are left with a difficult choice: go through the short sale process or the foreclosure process.

And in 2010 it is pretty clear that a large portion will end up in foreclosure which will only add to the shadow inventory of homes across the nation.

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