AB284 had an immediate and profound effect on both foreclosures and short sales. Looking at the data, when AB284 became law in October 2011, NODs (Notices of Default) stopped. This allowed homeowners that stopped making payments (something many were told to do by the very same banks in order to be taken seriously regarding modification) to stay in their homes, free, for what turned out to be well over a year, if not more. The public and private sector are working on modifying the legislation to start clearing the backlog of NODs as well as foreclosures, the often talked about 'Shadow Inventory'. This should also hasten turnarounds on short sales, which are still taking too long in most cases.
This should free up inventory, but we are still not certain as to how many will be short sales and how many will go back to the bank as foreclosures. In addition, no one knows for sure if it will be a trickle or will the flood gates open.