Shadow inventory, or the cache of homes not yet on the market but already—or likely to end up—on the balance sheets of banks, the FHA, Fannie Mae, or Freddie Mac for sale is another factor in keeping the level of distressed properties high.

However, in 2011, both MLS inventories and shadow inventory showed signs of easing. An estimated 3.5 million homes appeared on MLS’s across the country in September 2011. That’s 13 percent fewer than a year earlier in 2010. Meanwhile, the shadow inventory dropped from 1.9 million to 1.6 million, according to calculations by NAR researcher Selma Hepp from February 2010 to July 2011. This reduced inventory was partly a result of firming home prices and great employment growth that carried into 2011. Together, these factors lowered the national 90-day delinquency rate of all mortgages from the 5 percent we saw in the first quarter of 2010 to 3.5 percent in the third quarter of 2011.

That being said, unfortunately, the foreclosure rate remains ridiculously high. Moreover, a large number of properties that will eventually be sold were held up in the latter half of 2010 and early 2011 due to correct processing problems. Phoenix hard money lender.

Last year, short sales rose by 26,000 while foreclosures fell by 255,000, according to Hope Now, a mortgage industry alliance. RealtyTrac reported that September 2011 marked the 12th straight month in which foreclosure activity decreased on a year-over-year basis. October, however, saw filings spiked 7 percent from the previous month, and the month-over-month activity was much higher in the housing markets of California, Nevada, Arizona, and Florida, where the downturn was sharpest, as well as in markets where the judicial process held up foreclosure sales. A RealtyTrac press release from November of 2010 from CEO James Saccacio said, “The October foreclosure numbers continue to show strong signs that foreclosure activity is coming out of the rain delay we’ve been in for the past year.”

Retooling is now underway for government programs aimed at helping struggling homeowners because these programs haven’t been as helpful as some would have liked. The Home Affordable Refinance Program program of November 2010, was revised with relaxed criteria that observers hope will double the number of home owners who will eventually benefit. Meanwhile, in order to reduce monthly payments, private loan modifiers have shifted their strategy. Now, the share of loans that are six or more months in default 12 months after modification have improved, from 58.1 percent in 2008 to 26.6 percent in 2010.

Remember, it’s not too late to make distressed sales something you can do for your clients. This special report you just read takes a closer look at how these distressed sales have changed since the carefree market of 2008 and also provides insights on how to run a successful short sale or foreclosure operation. Check out Phoenix hard money lenders.