Bank of America expects to release about 6,000 foreclosed properties into the Nevada housing market in 2010, about 500 a month, according to the Las Vegas Review-Journal.

The pent-up supply is part of that looming “shadow inventory” – a stock of distressed properties that have yet to hit the market because of banks’ voluntary foreclosure moratoriums prior to implementing the administration’s Making Home Affordable program, complex modification evaluations, lengthy short sale negotiations, and state laws requiring pre-foreclosure mediations.

At a panel discussion sponsored by the Nevada chapter of the National Association of Hispanic Real Estate Professionals, John Ciresi, VP and portfolio manager for Bank of America in Towson, Maryland, explained just how “clogged” the pipeline has become.

Throughout the country, estimates of homes being taken back by Bank of America range from 11,000 to 14,000 a

month in the early part of this year to 29,000 to 35,000 by November and December, Ciresi said, according to the local Review-Journal.

He also noted that some properties haven’t closed escrow because of contractual agreements Bank of America has with investors.

According to the local paper, Ciresi anticipates a rise in the foreclosure rate in 2010 because he says 60 percent of loan modifications will fail and go into foreclosure – a combination of property devaluation and people losing their jobs.

Ciresi told the Las Vegas Review-Journal that Bank of America is getting 40,000 offers a month on short sales – a practical alternative to foreclosure – but he says it’s a difficult process, particularly because the lender doesn’t have the title in a short sale as they do in an REO transaction.

The latest market report from First American CoreLogic puts the industry’s total shadow inventory at about 1.7 million. Studies from others, such as Amherst Securities say it’s closer to 7 million.

While many experts warn that when this supply finally does make its way out of the shadows, it could stop recovery dead in its tracks and send the housing industry into another tailspin, recent commentary from RadarLogic says it all depends on how lenders handle the disbursement. The company argues that “bankers and mortgage investors are rational” enough to liquidate the pipeline at a controlled rate that can be absorbed by existing demand without drastically depressing prices.