These (millions of) properties distort the overall housing inventory picture, making it appear as if we’re in better shape than we really are.
If these homes were to be unloaded all at once, it’d be a major drag on home prices and would likely destroy any semblance of a recovery.
At the same time, there’s a major foreclosure backlog, as evidenced by the latest monthly Mortgage Monitor report from Lender Processing Services.
However, more than 31 percent of loans that have been delinquent for six months are not yet in foreclosure, and 22.8 percent of loans 12 months delinquent have not been moved to foreclosure status either.
The latter number is up from nine percent in 2008, which shows just how bad the foreclosure backlog is becoming.
During January 2010, 346,000 borrowers became delinquent for the first time – the national delinquency rate now stands at 10.2 percent, while the foreclosure inventory rate is 3.3 percent.