The number of residential loans entering the foreclosure process is falling, with "no evidence" that a backlog is building up that could suddenly flood the market, according to the chief economist of the Mortgage Bankers Association.
Many are worried that servicing and foreclosure problems and on-going settlement talks between major servicers and state attorneys general have slowed the foreclosure process.
"There is no evidence of a nationwide artificial delay in loans going into foreclosure," MBA chief economist Jay Brinkmann told reporters Monday during a briefing on the group's new delinquency survey.
If there were a backlog, the percentage of seriously delinquent mortgages would be increasing, Brinkmann said. Mortgages that are 90 days or more past due are considered to be seriously delinquent.
On the contrary, the serious delinquency rate for all mortgage loans was 3.61% as of June 30, down from 4.82% a year ago. The rate of loans that were 90 days or more past was 3.62% in the first quarter.
"There is nothing in the structure at this moment that indicates an unknown overhang that is going to take people by surprise," Brinkmann said.
The MBA report also shows that foreclosure starts are down to the lowest level since the first quarter of 2007.