Just when you thought it might be safe to go back in the (real estate) water:

These seriously delinquent loans are the 4.3 million loans MBA Chief Economist Jay Brinkmann referred to as the "shadow inventory" on the conference call this morning. Not all are really "shadow inventory" since some of these loans will be modified, some will be cured (probably very few), and some are probably already listed as short sales. But it does suggest a significant number of distressed sales coming…

Thirty four states and the District of Columbia have total delinquency rates over 10%. This is a widespread problem.

h/t to Ed Cone for the link.