Seriouslyrndelinquent loans are the main driver of the shadow inventory and between Aprilrnand July this number declined substantially in a number of states.  These delinquencies were down 3.2 percent inrnArizona, 2.8 percent in Pennsylvania, 2.3 percent in New Jersey and 2.2 percentrnin both Delaware and Maine.  </p

Roll rates are therntransition rates of loans from one state ofrnperformance to thernnext. rnCoreLogic said that, beginning withrnthis report, curernrates are factored in as wellrntorncapture the rise in foreclosure timelines andrnfurtherrnenhancernthernaccuracy of the shadow inventoryrnanalysis. </p

Transition rates of “delinquency to foreclosure” and “foreclosure to REO” are used to identify therncurrently distressedrnnon-listed properties most likely tornbecome REO properties.</p

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AnandrnNallathambi, president and CEO of CoreLogic commented, “Broadly speaking, thernshadow inventory continued to shrink in July. rnThe reduction is being driven by a variety of resolution approaches.  This is yet another hopeful sign that thernhousing market is slowly healing.”</p

“The declinernin shadow inventory has recently moderated reflecting the lower outflow ofrndistressed sales over the past year,” Mark Fleming, CoreLogic’s chief economistrnsaid.  “While a lower outflow of distressedrnsales helps alleviate downward home price pressure, long foreclosure timelinesrnin some parts of the country causes these pools of shadow inventory to remainrnin limbo for an extended period of time.” rn</p

As of July 2012, Florida, California, Illinois, New York and New Jerseyrnmake up 45 percentrnofrnall distressed properties in the country.</p

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