Arkansas foreclosure starts jump in November

The Arkansas foreclosure market remains unpredictable at best with a reported 455% annual increase in foreclosure starts initiated by lenders during November, according to RealtyTrac.

Foreclosure starts include defaults up to the point of trustee sale. Arkansas ranked second to New Jersey among the states where the early stage foreclosures rose. Only 18 states reported higher foreclosure starts last month.

Statewide there were 495 foreclosure filings reported in November, with 294 of those in the early to mid-phase awaiting trustee sale, and 201 were already bank-owned and at the tail end of the foreclosure pipeline. The sum total of Arkansas foreclosure filings rose 209% from a year ago.

The statewide comparison period involves a time when litigation stalled the entire state foreclosure process from October 2011 to April 2012.

On the national scene foreclosure starts fell to a 71-month low in November. According to RealtyTrac President Daren Blomquist, “The worst of the housing woes of the past six years are behind the nation as a whole.”

Blomquist says foreclosures are continuing to hobble the market as lenders finally seize properties that started the process a year or two ago. and much longer in some cases.

“We’re likely not completely out of the woods when it comes to foreclosure starts, either, as lenders are still adjusting to new foreclosure ground rules set forth in the National Mortgage Settlement along with various state laws and court rulings,” Blomquist said.

Among the five lenders involved in the National Mortgage Settlement — Bank of America, Wells Fargo, JPMorgan Chase, Citi and Ally/GMAC — non-judicial pre-foreclosure activity decreased 41% in November compared to a year ago, led by Bank of America with a 63% decrease and Citi with a 40% decrease. Arkansas is a non-judicial state, which means it does not require a judge’s ruling or court hearing to complete a foreclosure.

Meanwhile, judicial pre-foreclosure activity for the five lenders combined increased 26% from a year ago, led by Chase with a 114% increase and Wells Fargo with a 37% increase.

Blomquist says bank repossession increased annually for the first time in 25 months. Lenders completed the foreclosure process on 59,134 U.S. properties in November, up 5% from a year ago.

The number of bank repossessions in Arkansas rose 88% last month over the prior-year period. That didn’t come as any surprise because there are still properties held up from litigation that began in October 2011. After the moratorium was lifted earlier this year, the number of foreclosures making their way back onto market has been somewhat slow and controlled, according to local agents.

Arkansas was among the 29 states showing increased bank repossession last month. The Natural State reported an 88% increase in bank repossession from a year ago, This was second only to Indiana’s 96% increase.

There are 276 HUD and bank-owned property listings in the Multiple Listing Service which includes Benton, Washington, Crawford and Sebastian counties. This distressed inventory rose by 28 homes since last month, according to Jim Long, agent with Crye-Leike Real Estate in Bentonville.

“We are starting to see more HUD listings come in each week. But for the most part the better quality homes are moving pretty quickly,” Long said.

Last month he sold a HUD listing in the two-week grace period for $110,000 which was 10% above the list price. 

Long said once a foreclosure comes into the MLS (listing system). the first 10 days silent bids can be submitted via an auction format for owner occupation only. On the 11th day if a bid has not been accepted, the grace period is lifted and investors can bid.

“This protects potential homeowners from having to compete with investors and is required on all government agency-backed properties such as HUD, Fannie Mae and Freddie Mac,” he said.

Northwest Arkansas has been the state’s hotbed for foreclosure activity through the lengthy housing recovery. But the numbers seen now, while higher than last year are manageable according to local agents.

Together Benton and Washington counties reported 115 new foreclosure filings among its 180,892 households in November. Benton County had 59 and Washington County had 56, up 64% and 409% respectively, from the year-ago period when the moratorium was in place.

The Fort Smith metro area — Sebastian and Crawford counties — reported 26 new foreclosure filings in November for 82,766 households. Both of these counties also saw a rise in activity, up 88% in Sebastian County and 266% higher in Crawford County, again comparing to a time when the market had essentially stalled from litigation.

NOVEMBER FORECLOSURE FILINGS
Northwest Arkansas (Properties in the foreclosure process)
Benton County
2012: 59
2011: 36
63.89%

Washington County
2012: 56
2011: 11
409%

Fort Smith Region
Crawford County
2012: 11
2011: 3
266%

Sebastian County
2012: 15
2011: 8
87.5%