The reason the banks have not flooded the market with foreclosed properties is that it will not drive the bidding frenzy. That is the reason banks or trusts are trickling REOs into the market, they get a higher yield with buyers offering $20 to $80k above listing price. It's all about supply and demand.
Jes Sierra, B.Sc.
In regards to the end of this year and most of 2010:
"A surge of defaults is inevitable: About 5% of loans will go bad, up from 1.6% in 2008. And a few hundred more banks will go broke. Hardest hit: Small and midsize banks. They loaded up on developer loans as big banks gobbled up home mortgages during the housing boom."
Yes, not 1 or 10 or even 100, but hundreds of banks will go broke!!!
You can download the report with this web reference link
There may be several evictions that need to be processed, although there may also be efforts to keep people in the property.
"Both companies have announced a new rental program that will hopefully ease that transition. The program allows foreclosed homeowners to stay in the home under month-to-month lease agreements. The ex-mortgage borrowers would pay market rents, but would not be responsible for the home's maintenance costs.
Although the rental program doesn't pursue the goal of foreclosure prevention, it does offer some advantages. It will minimize the household disruption associated with foreclosure, while keeping the homes occupied. The latter is important because empty homes often fall into disrepair and become targets for vandalism; this impacts the quality of life in the neighborhood and puts downward pressure on housing values. Both factors have contributed to the record decline in housing prices over the last two years."
It may be another 2-3 months before we see the next wave of foreclosures.