One of the major topics of discussion among real estate types is an alleged "shadow inventory"of foreclosed homes that banks are holding off the market. The fear is that a deluge of those houses into circulation would depress prices even more.

But one foreclosure expert is now saying, "What shadow inventory?"

Sean O'Toole of ForeclosureRadar calculated the number of foreclosures that banks have repossessed and subtracted those that have since resold. His findings: banks are selling foreclosures faster than acquiring them, and the current inventory of bank-owned houses is less than should be expected.

It typically takes banks 7.3 months to sell a bank-owned home, but, with 90,365 properties in inventory, lenders have enough supply to last 4.77 months, O'Toole says. Banks have reduced inventories almost 42% in the last year.

"Bottom line," O'Toole says in his monthly report, "There is no shadow inventory of bank-owned homes being intentionally held from the market."

Of course, many people will argue that point, considering the number of houses headed into foreclosure. But those aren't yet owned by banks - and O'Toole isn't sure they ever will be. He thinks the political pressure to prevent that is too strong.

Thus, foreclosures may continue to trickle out into the marketplace over a long period of time: O'Toole calls it "kicking the can down the road."

Meanwhile, some people will simply decide to walk away from the house, and a loan that has become a trap.

"Psychologically, it's hard to to come home to a house that you are $100,000 underwater on," he said. "Life happens. You get a job loss, you are forced to move or there are cutbacks at work. It becomes more acceptable to walk away."

That's why he supports programs that encourage short sales - where a bank and homeowner agree to sell a house for less than what is owed. "Short sales are the near-term answer," he said.