Boca Mortgage Blog

A Fresh Perspective on Shadow Inventory

May 7th, 2014 1:24 PM by Leonard Silvestri

Have you heard the term "shadow inventory" being thrown about in mortgage lingo and wondered what it means? Shadow inventory is the number of homes in 90 plus days of delinquency that have a high risk of being foreclosed. In January 2010 nearly 3 million homes were believed to be in shadow inventory. Over the last four years that number has almost decreased by half, with a mere 1.7 million homes listed in shadow inventory as of January 2014. This article offers a different perspective on shadow inventory and its drawbacks on the current market.

Since the beginning of the housing crisis in 2008 housing experts have cited concern over the "Shadow Inventory" and the pitfalls it could present to any recovery of the housing market. Back then, as every month brought news of mounting delinquencies, rising unemployment, and pending adjustments to adjustable and teaser rate mortgages the shadow inventory had a particular definition; the number of homes with mortgages that are 90 or more days delinquent and that have a reasonable likelihood of ultimately being foreclosed and becoming bank-owned real estate even though they are not yet publicly listed for sale.

Lenny Silvestri
Posted in:General
Posted by Leonard Silvestri on May 7th, 2014 1:24 PM

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