Lender Processing Services (LPS) reported a spike in delinquency rates in the month of September, compared to August, which means even more foreclosures are likely to stack up on top of the shadow inventory. For those who think the REO bubble has burst, this should be a wake up call. It’s not even close to being over. In fact, some banks are holding back up to 90% of their REO inventory. These foreclosed homes don’t just disappear. They need to be sold!