U.S., Arkansas foreclosures off to a slow start in 2014

The nation’s foreclosure market continued to shrink in January, posting 40 consecutive months of declines on an annual basis, according to Calif., based RealtyTrac. Arkansas foreclosure filings were down more than 41%.

There were 124,419 foreclosure filings across the country last month, down 18% from a year ago. One in every 1,058 U.S. households had a foreclosure filing in January. 

Statewide there were 594 properties with a foreclosure filing last month, down 41.5% from the prior year. Northwest Arkansas and the Fort Smith metro area each posted lower filings year-over-year.

In Benton County there were 85 new filings, 33 of those were half way through the pipeline and slated for trustee sale, while another 55 were listed as bank-owned properties. Total filings declined 29.7% from January in 2013.

Washington County reported 35 new filings last month, the majority of those (25) were notices of trustee sale, while 10 others were bank-owned properties. Foreclosure activity is down 63.9% year-over-year, according to RealtyTrac.

Crawford County reported 15 new filings in January. All but four of those were notices of trustee sale. Total foreclosure activity fell 48% in January, when compared to year-ago period.

Sebastian County was a near mirror image of its neighboring county with 19 new foreclosure filings, with all but four being properties halfway through the lengthy foreclosure process. In the Fort Smith area foreclosures are 40% from a year ago.

Jim Long, an agent with Crye-Leike Realty in Northwest Arkansas, said there were 301 foreclosure properties listed for sale in the multiple listing service which includes all four counties in this report. He said the winter weather in recent weeks has cut down on the number of showings. The foreclosure properties declined from 322 reported in December.

The number of local foreclosure properties peaked at 373 in August of last year and has steadily declined each month.

One interesting note in the RealtyTrac report was the increase in new filings from December 2013. Statewide the number of filings rose 20% from December to January. Benton County posted a 60% increase month-over-month, while filings rose 128% in Washington County. 

Crawford County filings rose 15% month-over-month, while filings in Sebastian County were down 5% from December to January.

“The monthly increase in January foreclosure activity was somewhat expected after a holiday lull, but the sharp annual increases in some states shows that many states are not completely out of the woods when it comes to cleaning up the wreckage of the housing bust,” Daren Blomquist, vice president at RealtyTrac, said in the report.

A recent report to Congress (Jan. 24) indicates that there is active mortgage loan modifications being made to help stem foreclosures.

As of Dec. 31, there were 894,410 active permanent modifications granted through the Home Affordable Modification Program (HAMP Tier 1). About 88% of those modifications will have a rate increase after 5 years. The median payment increase after all rate increases will be around $200 per month, according the analysis of Treasury’s HAMP data.

Analysts believe some homeowners will be vulnerable to foreclosure when the rate resets. Of the 894,410 modifications, 28% have redefaulted on the mortgages and fell at least three months behind. In Arkansas there were 1,825 homeowners with active modifications, and 81% of those are subject to payment increases within five years of their original modification.

Treasury reported that of the homeowners with redefaulted loans, 27% of homeowners who redefaulted received an alternative modification, usually a private sector modification; 21% of homeowners moved into the foreclosure process; and 12% of homeowners lost their home via a short sale or deed-in-lieu of foreclosure.

Also, as of Nov. 30, there were 97,315 homeowners (11% of active HAMP permanent modifications) who had missed one to two monthly mortgage payments and are at risk of redefaulting out of the program.