The number of Arkansas properties in some phase of foreclosure during November fell more than 90%, with a September legal ruling possibly the source of the significant reduction.
Foreclosure actions during November in the Fort Smith region fell 88.6%, with foreclosure actions in Sebastian County down more than 91%, according to a monthly report from Irvine, Calif.-based RealtyTrac.
Nationwide, a total of 224,394 U.S. properties received foreclosure filings — default notices, auction sale notices and bank repossessions — in November 2011, a 14% decrease compared to November 2010, and down 3% compared to October. The report also shows that one in every 579 U.S. housing units had at least one foreclosure filing during November.
“Despite a seasonal slowdown similar to what we’ve seen in each of the past four years, November’s numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as REOs or short sales sometime early next year,” RealtyTrac CEO James Saccacio said in a statement. “Overall foreclosure activity is down 14 percent from a year ago, the smallest annual decrease over the past 12 months, and some bellwether states such as California, Arizona and Massachusetts actually posted year-over-year increases in foreclosure activity in November.”
Lenders repossessed (REO) 56,124 U.S. properties in November, down 17% compared to November 2011. REO activity in November was at its lowest level since March 2008, a 44-month low.
But those stats don’t tell the story of what may be happening in Arkansas.
RealtyTrac reported just 160 properties in Arkansas were placed in a foreclosure action, down more than 90% compared to 1,621 during November 2010. In the Fort Smith region, there were 20 properties in some phase of foreclosure during November, a big drop from the 176 during November 2010.
A Chapter 13 bankruptcy case in the Eastern District of Arkansas, Jonesboro Division, has caused title companies in the state to halt or slow the foreclosure process to determine if properties were properly taken back by lenders.
In the Sept. 29 decision, the court held that a lender not authorized to do business in the state of Arkansas was not in compliance with the state’s non-judicial foreclosure laws. That case, In Re Johnson, concerned objections filed by J.P. Morgan Chase Bank and the related Chase Home Finance regarding the confirmation of three Chapter 13 plans for debtors who had lost their homes to the lenders through non-judicial foreclosure proceedings.
Bob Balhorn, a Little Rock Realtor, said during an early November interview that the Johnson case had put the brakes on sales of the foreclosed properties at issue.
A RealtyTrac official said an initial check of their data collection showed no problems. The official pointed to the court ruling as the likely source for the reduced foreclosure actions.
“(T)he drop-off in foreclosure activity over the last few months, and particularly in November, is largely the result of the Johnson bankruptcy case,” said Daren Blomquist, director of marketing and communications with RealtyTrac. “Basically lenders are not going to keep foreclosing when they won’t be able to sell the foreclosed inventory they are acquiring.”
FORT SMITH AREA FIGURES (Properties in the foreclosure process)
Nov. 2011: 3
Nov. 2010: 47
Nov. 2011: 1
Nov. 2010: 6
Nov. 2011: 0
Nov. 2010: 4
Nov. 2011: 8
Nov. 2010: 95
Nov. 2011: 5
Nov. 2010: 20
Nov. 2011: 3
Nov. 2010: 4