NWA, Fort Smith area sees big drop in foreclosure numbers

The number of new foreclosure filings across the state remain low with 69 new defaults and 166 homes taken back by lenders in November, according to Irvine, Calif.,-based RealtyTrac. The foreclosure pace slowed 49% from the same month last year and fell 69% from October’s report.

Arkansas is one of several states that continues to see its housing markets improve, but experts said finding a new equilibrium is ongoing for much of the country.

“The housing market is struggling to find the new normal when it comes to a tolerable level of foreclosure activity in this post-Great Recession economy,” said Daren Blomquist, vice president at RealtyTrac. “Finding that new normal requires striking a balance between too much loan risk, which would result in another housing meltdown, and too little risk, which could result in a stunted recovery.”

LOCAL UPDATE
There were 237 foreclosure listings in the four counties of Benton, Washington, Crawford and Sebastian as of Dec. 11, according to Jim Long, agent with Crye-Leike Real Estate. That number is up from 192 listings over the past two months, but still well below the 360 listings reported a year ago.

The regional housing markets of Northwest Arkansas and the Fort Smith metro area reported similar foreclosure results in November.

Benton County reported 2 new defaults in November, with 15 homes going back to lenders for a total of 17 new filings. This rate is down 73% from a year ago, according to RealtyTrac data. In Washington County there were 4 loan defaults recorded in November and 2 homes recovered by lenders for a total of 6 new filings. The filing rate fell 76% from November 2013.

Sebastian County’s population of 125,795 reported just 1 new default and two other homes taken back in foreclosure in November. These 3 new filings represent an 82% decline from the same month last year. Crawford County reported 1 new default with four other homes secured by lenders through the foreclosure process in November for a total of 5 new filings. Foreclosure filings were down 85% from the prior month and 82% lower than in the year-ago period, according to RealtyTrac.

NATIONAL NUMBERS
Nationwide there were 112,498 U.S. properties in foreclosure last month, which was just a 1% decline from last year. That equates to one in every 1,170 households, and marks the 50th straight month of year-over-year declines, RealtyTrac reported.

Blomquist said some markets have started to see an uptick in foreclosure activity from loans originated earlier in 2014, which indicates some lenders are open to a slightly higher level of risk than seen in the past five years of extremely tight lending standards.

“But it’s unlikely that lenders will dial up that risk level too quickly going forward given that many are still dealing with working through a lengthy and messy foreclosure process on risky loans from the last loose lending spree,” he added.

Also this week, TransUnion forecast that the national mortgage delinquency rate will be 2.51% in 2015, the lowest level since the start of the recession in late 2007. They expect the rate to decline to 3.21% by the close of this year.

“We expect the national mortgage loan delinquency rate to continue its decline throughout 2015, marking four consecutive years of quarterly decreases,” said Steve Chaouki, head of financial services for TransUnion. “We anticipate interest rates to remain relatively low next year and unemployment rates to continue their decline, both of which should help fuel home sales and improve consumers’ ability to pay. Foreclosures are also expected to continue to funnel through the legal system in 2015, which will reduce delinquencies that have been lingering for some time. All of these factors will contribute to a further decline in mortgage delinquencies.”

Mortgage lenders continue to work with delinquent homeowners to avoid foreclosure when possible. Freddie Mac said it has provided workout options that have prevented more than 1 million foreclosures since 2009. Fannie Mae said its workout loan solutions have helped more than 1.6 million homeowners avoid foreclosure.
Another federal program — Hope Now — has provided 468,000 homeowners with non-foreclosure solutions in the third quarter of this year. During this period foreclosure starts rose 6% and foreclosure sales declined 6% from the year-ago period.

Foreclosure sales totaled approximately 108,000 for the quarter, the lowest quarterly total for foreclosure sales recorded since Hope Now began tracking loan data in 2007. Hope Now also reported that mortgage delinquencies of 60-days or more totaled 1.89 million as of Oct. 30, a decline of 10% from a year ago.