Others say banks’ reluctance to record losses, combined with the government’s continued attempts to stem the foreclosure tide, could prolong the situation for years.
“When the shadow inventory will hit the market and what the impact will be are still the big unknowns,” said Dan Reynolds, the director of business development at LAMCO, a Littleton, Colo., company that manages repossessed properties for banks. “The scary thing is that if they don’t deal with it, the problem just gets larger and larger.”
First American CoreLogic, an analytics unit of the Santa Ana, Calif., title insurer First American Corp., has estimated that 1.7 million homes make up the shadow inventory — properties that have been repossessed, are in foreclosure, or are seriously delinquent.
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