In a research note titled "Foreclosure Update: over 8 million foreclosures expected" (no link, hat tip Frank) updated last week, Credit Suisse analysts are now forecasting 8.1 million homes will be in foreclosure by the end of 2012, representing 16% of all households with mortgages
The analysts projected this could be as low as 6.3 million in a mild recession, with a somewhat successful loan modification program (re-default rates at around 40%), and as high as 10.2 million in a more severe recession. Via Calculated Risk.
These are reasonable foreclosure estimates by Credit Suisse. The huge job losses (530K in November) that are occurring, will make a very large contribution to the millions of foreclosures that are coming in the next 3 years. Of course, this huge wave of foreclosures and large job losses will put strong downward pressure on home prices.