Shadow inventory

Foreclosures in waiting:

Henry Fishkind, an Orlando-based housing economist, says some banks tell him they “are holding back [foreclosed-home] inventory” to avoid depressing prices any more than necessary. “It’s in their interest” to avoid flooding the market, and regulators haven’t forced them to do so, he says. That suggests that the backlog of homes headed for foreclosure will be stretched out over several years. ...

Jack McCabe, a housing analyst in Deerfield Beach, Fla. ... points to the temptation for borrowers to stop paying their mortgages because they don’t believe they will ever have equity and expect banks to take a long time evicting them. Mr. McCabe says he knows people who haven’t paid their mortgages in more than a year and still haven’t been evicted. “Some people are saying, ‘I could pay my mortgage bill, but why?’”