Foreclosures trickle back into the market

One in 581 households across the natural state were involved in foreclosures proceedings during the first half of this year. That number hit closer to home in Benton and Washington counties with foreclosure filings in one of every 237 and 304 households, respectively, according to Irvine, Calif.-based RealtyTrac.com.

At those numbers, filings are down nearly 80% from the same period of last year as legal proceedings essentially put a moratorium on foreclosure activity since October of last year.
A recent ruling reversal in the Eastern District of Arkansas has allowed the foreclosure pipeline to gradually open.

“We are starting to see more foreclosure properties since the ruling was reversed in May. In the past 30 days, 59 new HUD and bank-owned properties have come back into the multiple listing service for this entire region which includes Fort Smith,” said Vicki Briolat, broker with Crye-Leike Real Estate in Bentonville.

She said there are 254 bank-owned properties in the listing service, that compared to 258 properties last month. Briolat and other agents say these distressed homes are selling pretty quickly, those in the best shape are getting multiple offers.

In June, there were 90 filings in the Benton and Washington counties. Those filings ranged from initial default notices to bank repossession. Total foreclosure activity fell 88% in the two-county area from a year ago, according to RealtyTrac,

“Additional scrutiny on how lenders and servicers process foreclosures, along with aggressive foreclosure prevention efforts by the federal government and several state governments, continue to keep a lid on the foreclosure problem at a national level,” said Brandon Moore, CEO of RealtyTrac. 

He said lenders and servicers are slowly but surely catching up with the backlog of delinquent loans that under normal circumstances would have started the foreclosure process last year, and that catching up is why the average time to complete the foreclosure process started to level off or decrease in some states in the second quarter.

As these properties progress through the pipeline unencumbered from litigation, Moore expects to see more short sales and bank repossessions in the back half of this year.

The average time to process a foreclosure in Arkansas ranged between 126 and 157 days prior to the moratorium placed last fall. In the third quarter of 2011 foreclosures stalled out 387 days, that time frame shortened to 326 days in the first quarter of this year and fell to 188 days in the quarter ending June 30.

Arkansas is a non-judicial state which allows banks to forego longer court proceedings and a judge’s signature that is required in states with mandatory judicial foreclosures.

New York holds the record for the longest foreclosure time frame at 1,001 days in the second quarter.

Bank-owned (REO) properties that sold in the second quarter took an average of 195 days to sell from the time they were foreclosed, up from 178 days in the first quarter. REO properties took the longest to sell in New York, at 430 days, followed by Arkansas at 357 days and New Jersey at 354 days.

FORECLOSURE FILINGS (2nd quarter ending June 30)
Northwest Arkansas (Properties in the foreclosure process)
Benton County
2012: 220
2011: 1,044
-78.93%

Washington County
2012: 151
2011: 859
-82.42%