Many analysts are saying there is another looming shadow inventory coming from REOs. Banks are holding back REOs from the market, leading to the speculation. According to some experts, as many as 90% of REOs are being intentionally held off the market. If this is the case, we’re in for another flood, it’s just a matter of time. Letting all the backlog of inventory loose could potentially bankrupt some of the bank lenders, according to Thomas Martin, president of Americas Watchdog – a consumer advocacy group. The correlating problem would be a steep decline in already struggling home prices. According to CoreLogic, only 39,000 – or 10% - of foreclosed homes are actually on the market for sale. That’s out of 390,000 total. This is enough to keep investors on their toes, and economists nervously watching to see what happens next.
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