Thanks to the national foreclosure mess, it could take up to 40 months to clear a 1.5 million unit "shadow inventory" tied to non-agency delinquent mortgages, foreclosures and REOs, according to a new report from Fitch Ratings.

"While the reduced volume of distressed sales since 2009 has temporarily helped home prices, Fitch believes that the extension in foreclosure and liquidation timelines is simply prolonging the housing correction underway," writes Fitch analyst Grant Bailey and two others.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.