The number of distressed properties not currently listed for sale on multiple listing services (MLSs) stood at 1.6 million as of October 2011, according to CoreLogic.

This shadow inventory is approximately half of the industry’s visible inventory of homes available for sale, CoreLogic says. Thus, for every two homes available for sale, there is one home in the “shadows.” CoreLogic’s latest shadow inventory assessment represents a supply of five months and is down from October 2010, when shadow inventory stood at 1.9 million units, or 7-months’ supply. CoreLogic estimates the current stock of properties in the shadow inventory, also known as pending supply, by calculating the number of distressed properties not currently listed on MLSs that are seriously delinquent (90 days or more), in foreclosure, and real estate owned (REO) by lenders.

The foreclosure crisis has had a long and destructive run – five years and counting, with millions put out of their homes. According to the Center for Responsible Lending(CRL), we’re not even halfway through the devastation.

The organization’s analysis of 27 million mortgage loans originated over a five-year period found that 6.4% of mortgages made between 2004 and 2008 have ended in foreclosure, and an additional 8.3% are at immediate, serious risk. The study also offers up evidence that foreclosure patterns are strongly linked with patterns of risky lending. According to CRL, foreclosure rates are consistently worse for borrowers who received high-risk loan products that were aggressively marketed before the housing crash, such as loans with prepayment penalties, hybrid adjustable-rate mortgages (ARMs), and option ARMs.

Looking at the demographics of foreclosure casualties, CRLfound that the majority of people affected by foreclosures have been white families. However, borrowers of color are more than twice as likely to lose their home, the organization says. According to CRL, these higher rates reflect the fact that African Americans and Latinos were consistently more likely to receive high-risk loan products, even after accounting for income and credit status. African Americans and Latinos were much more likely to receive subprime loans with high interest rates and loans with features that are associated with higher foreclosures,CRL explained. The nonprofit group found that these disparities were evident even when comparing borrowers within the same credit score ranges, with the gap especially pronounced for borrowers with higher credit scores.

It’s a daunting number, but the data show that it’s actually been on a fairly steady decline for nearly two years now. At the start of 2011, the total number of non-current mortgages in the U.S. stood at 6,870,000. In January 2010, it was 8,118,000. LPS’ more recent reports show the industry is slowly but surely chipping away at the number each and every month – the result of both loss mitigation workouts and removing loans that cannot be resolved from the inventory through foreclosure. At September month-end, the tally of non-current mortgages was 6,373,000. It was 6,397,000 at the end of August and 6,538,000 at the end of July. LPS’ data indicates mortgage delinquencies are declining while the nation’s foreclosure inventory is growing.

Of the 6,298,000 loans past due at the end of October, 2,329,000 were behind on their payments by 30-89 days and 1,759,000 were 90 or more days delinquent but not yet referred to foreclosure. Combined, these tallies represent 7.93% of the nation’s outstanding mortgages that are delinquent but not in foreclosure. The October delinquency rate is down 2.0% from the previous month and is 14.6% lower than the rate recorded in October 2010. The foreclosure inventory rate, on the other hand, is up by both measures. LPS says 4.29% of the nation’s mortgages are winding their way through the foreclosure process, a month-over-month increase of 2.5% and a year-over-year increase of 9.4%. By LPS’ calculations, there were 2,210,000 residential mortgage loans in foreclosure at October month-end. States with highest percentage of non-current loans – which combines foreclosures and delinquencies – include: Florida, Mississippi, Nevada, New Jersey, and Illinois. Montana, Wyoming, South Dakota, Alaska, and North Dakota have the lowest percentage of non-current loans.

Data released by Lender Processing Services (LPS) Thursday shows mortgage delinquencies are continuing to decline, now nearly 30% below their January 2010 peak.

Loans in the process of foreclosure, on the other hand, are steadily rising. LPS says foreclosure inventories reached an all-time high at the end of October, making up 4.29%  of all active mortgages.

The average days delinquent for loans in foreclosure extended as well during the month of October, setting a new record of 631 days since last payment, while the average days delinquent for loans 90 or more days past due but not yet in foreclosure decreased for the second consecutive month.

That ominous shadow inventory of repossessed and soon-to-be repossessed homes is getting smaller.

Standard and Poor’s (S&P) has released its third-quarter shadow inventory update, which shows both the volume of distressed assets and the amount of time it’d take to liquidate these properties is contracting. S&P says the volume of distressed residential mortgages included in its shadow inventory estimate remained “extremely high” at $384 billion in the third quarter, but it has declined in each quarter since mid-2010. S&P’s third-quarter evaluation is down from $405 billion at the end of the previous quarter.

National home prices have been on the decline since June 2006 with a few bursts of increases, which Lender Processing Services (LPS) attributes to seasonal trends. Overall, prices have declined 28.3% since their peak in June 2006, according to LPS’ new home price index.

From July 2007 to December 2009, prices declined an average of 13.8% annually. The total decline for this period of rapid decline was $56,000, according to LPS. After December 2009, prices began to decline at a slower pace, posting an annual decline of 3.6% and falling a total of $20,000 from December 2009 to the present.

LPS reports home prices fell 0.9% across the nation in August, after a smaller 0.4% decline the previous month. August prices were 3.8% below last year’s prices. This ended a series of increases during the spring of this year; a pattern that has occurred each year since 2009. In addition, the early, partial data for September sales indicates a likely further decline of approximately 1.1% to come. Price declines were relatively steady across the country in August, though declines varied somewhat between higher- and lower-priced homes.

Foreclosure filings in October rose 7%  from the previous month, RealtyTrac reported Thursday.

Including default notices, scheduled auctions, and bank repossessions – which all increased month-over-month – filings were reported on 230,678 U.S. properties in October. That grand total is down nearly 31% from a year earlier, when servicers began putting the brakes on foreclosure actions due to paperwork issues. But RealtyTrac has documented a rise in filings for three consecutive months now – a sign that servicers are working through the backlog of cases that have been delayed.

While the October numbers indicate unpaid mortgages are finally making their way through the pipeline, James Saccacio, RealtyTrac’s CEO, says he’s concerned other forces at work could throw a wrench in foreclosure processing. “[R]ecent state court rulings and new state laws keep changing the rules of the foreclosure game on the fly,” Saccacio said, “creating more uncertainty in the housing market and threatening to prolong the road to a robust real estate recovery.”

Nevada is one example of a change in foreclosure rules. It saw a 34% decrease in filings, driven by a new state law that took effect in October and requires lenders to sign and record an affidavit with key information about any pending foreclosure. The foreclosure hotbed of Las Vegas recorded a 36% decrease in overall foreclosure activity, caused by an 80% drop in new default notices from September to October. Las Vegas had held onto the title of highest metro foreclosure rate for 22 consecutive months, but with October’s decline, it slipped to the No. 5 spot.

Foreclosure starts among private-label residential mortgage-backed securities (RMBS) have been rising toward historic averages over the past six months, which will lead to an influx of distressed properties bringing downward pressure to the housing market, according to recent RMBS Performance Metrics from Fitch Ratings.

According to Fitch, foreclosure start rates for severely delinquent RMBS loans have stayed above 10% since September — a rate they have not reached since November 2009 — and have been working their way toward their 14% average between 2000 and 2010. “Rising foreclosure start rates are likely a sign that servicers are playing catch-up on actions that have been delayed over the past year,” states Diane Pendley, managing director of Fitch Ratings. In fact, the rise in foreclosure starts has occurred most heavily among severely delinquent loans. Foreclosure starts among loans that have been delinquent for six months or more have almost doubled in the past five months.

Temperatures are falling, and so are home prices in most local markets. Clear Capital says it’s expecting another long winter as the housing industry tries to cope with the downward forces of weak demand, record-low consumer confidence, and distressed inventory.

Quarterly home price gains through October retreated to near-flat levels with only 0.6% growth at the national level, compared to the 3.5% quarterly increase reported by Clear Capital in September. The seasonal gains seen during the stronger spring and summer months have not been enough to push year-over-year home prices into the black.

Clear Capital’s October index reading puts national home prices 2.8% below a year ago. It marks the 13th consecutive month that annual price changes have fallen on the minus side of the data chart. “October home price gains have leveled out, confirming what our data has pointed to over the last several months,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “Short term gains have been nearly eliminated while longer term performance measures point to mostly negative territory through the turn of the year.”

Mortgages backing homes that were foreclosed on in September had been delinquent for an average of 624 days, according to Lender Processing Services (LPS). That’s up from 484 days in September of last year, just before the processing issues surfaced.

That 624-day foreclosure timeline is the national average. LPS says timelines in judicial states continue to extend at a greater rate. The time from last payment made to foreclosure sale in judicial states is 761 days, which is six months longer than in non-judicial states. Consequently, the company’s study shows foreclosure sales in judicial foreclosure states remain very low, with only 1.6% of their foreclosure inventories moving to sale. The slow pace of liquidation has caused the foreclosure pipeline to balloon, with nearly 7% of the entire active loan count in judicial states in foreclosure.

Ranked by the percentage of loans that are non-current, seven of the top 10 states are judicial foreclosure states: Florida, New Jersey, Illinois, Ohio, Indiana, Louisiana, and Maryland. Non-judicial states making LPS’ top-10 list include Mississippi, Nevada, and Georgia. Looking at the national foreclosure population, LPS says almost 40% of loans in foreclosure have not made a payment in two years, and 72% have not made a payment in a year or more.