Fears of an REO glut persist

Part 1: Sizing up the 'shadow inventory'

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There are lingering fears that the fragile recovery under way in many housing markets could be derailed by a "shadow inventory" of homes that have either been repossessed by lenders, are in foreclosure, or whose owners are behind on their loans.

An estimated 7 million homeowners are currently behind on their loans or in the foreclosure process — roughly double the number two years ago.

Not all of those homes will end up on back on the market. Some homeowners will "cure" their delinquent loans through a loan modification or by refinancing.