The larger picture however points to a decline in shadow inventory in 2013. JPMorgan anticipates 650K of re-defaults (could be worse if Apple comes up with a new popular product) and 1.2 million of new delinquencies. At the same time existing delinquencies are working their way through the "python" (see post from a year ago) - modifications, short sales, and liquidiations. The forecast is a net 380K reduction.