Foreclosures in Arkansas remain few and far between during the first three months of this year, affecting 1,107 Arkansas homeowners according to Irvine, Calif.-based RealtyTrac.
The number of statewide filings against homeowners delinquent on their mortgages declined 79% from a year ago. But activity actually doubled from the fourth quarter of 2011 when the entire market stalled after a court ruling threw a wrench in the foreclosure pipeline.
Local real estate professionals say a few houses removed from the bank-owned inventory are starting to trickle back into the market in Northwest Arkansas which has the pipeline slowly moving on the back end. But there are still no new notices of default which means the front end remains clogged.
“Until this is resolved and the foreclosures and shadow inventory can work their way into and out of the foreclosure process the overall real estate market won’t fully recover,” said George Faucette, president of the local Coldwell Banker franchise in Northwest Arkansas.
“The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated,” said Brandon Moore, CEO of RealtyTrac. “There are hairline cracks in the dam, evident in the increases in activity among both judicial and non-judicial states in March.”
He said the dam may not break in the next 30 to 45 days, but warns folks downstream to prepare themselves for when it does give way. Moore expects there will be a flood of foreclosure activity and resumption of short sales which could depress prices in some areas.
Arkansas is one of 24 states with a non-judicial foreclosure process — an abbreviated method that does not require a court hearing or judge’s signature. But many of those cases have become stalled in the process awaiting the outcome of the two appeals in ongoing litigation at the state level.
Arkansas posted the biggest year-over-year decline among the non-judicial states. But those results remain skewed by the litigation. Nevada, also a non-judicial state, has similar litigation pending and reported a 64% decline in filings from the previous year.
Again last month there were no new notices of default posted for the entire state. The default notice is the first of three steps in the foreclosure process and occurs when a homeowner becomes more than 90 days past due.
A small percentage of the new filings were those homes taken back by banks following the trustee sale. This is third and final phase of the lengthy foreclosure process.
For homes exiting the foreclosure process in the first quarter, it took an average 370 days across the nation. In Arkansas the time frame was 326 days. New York posted the longest time frame at 1,056 days, according to RealtyTrac.
Kim Souza with our content partner, The City Wire, is the author of this report. She can be reached by email at firstname.lastname@example.org.