Lack of inventory May Lead to Slow Down

From In market after market we read and hear that the supply of homes for sale continues to shrink and is now approaching a critical level, given the passionate level of buyer interest.  The most common question we hear is “where is the shadow inventory” we have all been reading about?  With inventory this tight why don’t Fannie, Freddie, FHA and the banks bring those homes to the market for surely there is a demand in most every market for these homes at this time?