“A government report formerly http://www.washingtonguardian.com/sites/default/files/may_2013_housing_igs_report.revised.v2.pdf says that 1.7 million homeowners are 90 days or more late in their mortgage payments. Fannie Mae and HUD will wind up with these homes on their books, unless they decide to let the homeowners live rent-free. This is shadow inventory. It hangs like the sword of Damocles over the housing market. If the government does nothing, these homeowners will receive a huge subsidy: a tax-free grant equal to their mortgage payment, month after month, year after year. But if it forecloses, what will it do with these empty houses. Then the subsidy goes to operators of the squatters. Will the government kick the can? Probably.”
http://teapartyeconomist.com/2013/07/09/1700000-foreclures-are-in-the-pipeline/
