The housing crisis appears to have subsided as foreclosures have been on the decline for months. However, experts say that the real estate market is years away from recovery. In South Florida alone, approximately 201,000 homes are in one of three states of foreclosure limbo:

First, there are distressed homeowners who have not been able to make a payment for three months or longer, but they are still able - for the time being - to live in their homes. Second, there are homes which lenders have repossessed but haven't put it back on the market yet. Third, there are homeowners who have been issued a notice of foreclosure or default, but their homes have not yet been taken from them.

This number of 'homes in limbo' stands to exponentially increase the current number of homes currently on the market in South Florida, which is about 30,000. This means it could still be years before the real estate market is recovered.

Nationwide, the figures for homes in this sort of foreclosure limbo are staggering and are believed to include anywhere from 1.6 million to 7 million houses. Some mortgage lenders, like Bank of America, have been holding foreclosed properties since 2008.

Government lenders, on the other hand, are putting foreclosed homes to market as fast as possible. The Federal Housing Administration along with Fannie Mae and Freddie Mac are liquidating much sooner than commercial lenders.

This may be because private banks take a loss when they liquidate a bank-owned home, and property analysis from CoreLogic estimates conservative total losses to be about $336 billion.

Additionally, a second wave of foreclosures is expected. After details of such scandals as the abuse of the Mortgage Electronic Registration Systems and "robo-signing," lenders slowed foreclosures dramatically. RealtyTrac, a company that specializes in real estate research, discovered that over one million foreclosures slated to occur in 2011 have been postponed until 2012.

Recovering from the housing crisis will be slow, but it also could mean that homeowners will have a greater chance to negotiate a settlement or loan modification with their lenders. If you are struggling to pay your mortgage, plan ahead to work something out with your bank. This could end up saving your home from foreclosure.

Source: The Miami Herald, "'Shadow inventory' of homes could topple real-estate recovery," Toluse Olorunnipa, Oct. 15, 2011.