CNN reported that there were more foreclosure filings any time since the great depression. Just 6 states accounted for 62% of all foreclosures in the US with Nevada and Florida leading the pack. Nevada showed one filing for every 23 households.
They touched on the fact that banks are reluctant to take back delinquent properties. These properties do not show on the books and have been called a shadow inventory, an inventory that has been estimated as more than 1.5 times the inventory listed in the MLS.
Taking back these properties would require that the banks would have to report the true value to the regulators, and to do so might put them at risk of government takeover. Thus they keep the non-performing loans in force and pretend that the loan is is all well and good. They are pretending that they are healthy in hopes that when all the dust settles they will be able to work things out without too much trouble.
They may be rudely surprised.
A summary can be seen here.