Thanks to a 10% monthly increase in the S&P/Case-Shiller index – the first increase in seven months– and inventories of existing homes for sale falling to near-normallevels, some media outlets and market pundits are declaring an endto the housing crisis.

However, a San Diego-based firm that assists strugglinghomeowners with strategic defaults isn't buying it. According to arecent survey of its 7,000 clients, YouWalkAway.com is reporting significant foreclosure backlogsthat CEO Jon Maddux predicts will result in lower home values.

“Eighty-five percent of the homeowners we're working with are inpre-foreclosure and have not made a mortgage payment for an averageof 14 months,” Maddux said.

The survey suggests foreclosure problems are budding in statesthat haven't yet grabbed headlines. For example, almost noYouWalkAway clients in Minnesota have received foreclosure notices,even though they haven't made a house payment in 12 months onaverage, Maddux said.

In North Carolina and Maryland, 88% of clients have not receivedforeclosure notices, despite being an average of 13 months and 19months delinquent, respectively. In Texas, YouWalkAway clients onaverage are 16 months past due, but 85% aren't yet facingforeclosure.

Compare those numbers to Florida, where the average client is 17months delinquent, but 55% are in foreclosure, Maddux said. InCalifornia, clients are 15 months delinquent on average with morethan 40% already in foreclosure.

“Unfortunately, new homeowners and investors may see asignificant devalue of their properties due to the substantialamount of shadow inventory,” Maddux said. “The longer it takes tobegin the foreclosure and process the property through the system,the longer it will take for housing market recovery.”