By Daily Crux Editor Brandon Herrin:

Millions of foreclosed homeowners are attempting to delay the foreclosure process and, in turn, creating a "shadow" inventory of foreclosed homes.

As of July, an estimated 1.2 million homes that had not yet been foreclosed upon were considered seriously delinquent – more than 90 days past due on payments. Additionally, 1.5 million homes were in the foreclosure process but had not yet been seized by the lender.

The build-up in foreclosed homes is sure to hit the market in the future and drive prices farther south. Ivy Zelman, chief executive of research firm Zelman & Associates, estimates 3 to 4 million foreclosed homes will hit the market in the coming years. The question now is whether the future supply will mimic "a fire hose or a garden hose or a drip."

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