As lenders begin processing foreclosures again, they may end up flooding the market — and cause housing prices to drop, according to a report from Fitch Ratings.

An increase to more normalized foreclosure initiation rates will ultimately add to the inventory of distressed properties on the market. This will in turn increase negative pressure on US home prices further supporting Fitch’s view that home prices will decline further before they fully stabilize.

(For translation, just see the first paragraph.)

The company said that it may take a year for the effects to be felt.

Click here for the Fitch report, or click here for DSNews.com’s explanation.