Rick Sharga, President of Realty Trac, Inc., made the following prediction: Foreclosures for 2009 will be 2.8 million to 3 million households when all the numbers are in, up from 2.3 million in 2008.

2010 willlikely exceed 3.5 million. The trne will not reverse itself until 2011, and foreclosure activity won't settle back down to "normal" until 2013.

Short sales? He feels that lenders will increase granting short sales if the Treasury Dept. presses hard enough. But a big problem is the number of second loans, and lenders in first position will begin foreclosing in order to use the second as equity.

If the lender in first position forecloses, all junior liens are wiped out.If you have a $150,000 first mortgage and a $30,000 home equity line of credit (the second), and the first forecloses, the $30,000 second is wiped out. Sharga is saying that first lenders will, in essence, foreclose and sell at auction to get their money back, since the sales price will be reduced.