Third quarter U.S. foreclosure pace hits 8-year low, filings down in local markets

Foreclosures are not the factor they once were in local real estate markets across the state and nation. The local rates continue to decline faster and farther than the nation as a whole.

In Benton and Washington counties there were 38 households slated for auction in the third quarter of 2014, down from 82 reported in second quarter of 2014, and 169 filed in the third quarter last year, according to Irvine, Calif.,-based RealtyTrac.

There were 86 total filings in Northwest Arkansas which includes bank-owned properties at the end of September, down 81% from 463 filings reported a year ago.

The Fort Smith metro area registered 16 local homes slated for auction in the third quarter, well below the 57 properties entering foreclosure in the year-ago period. Sebastian and Crawford counties report 38 total filings, which includes bank-owned properties at the end for the third quarter. Filings are down 24% from the second quarter. Crawford County’s total filings declined 30% from a year ago, while Sebastian County experienced a 70% reduction in that annual period.

Jim Long, a real estate agent for Crye-Leike in Bentonville, said there are 192 property listings in the MLS – Northwest Arkansas and the Fort Smith areas – considered foreclosures. Those properties range from 42 HUD properties near $100,000 to upper end homes nearing $200,000 stretched from Fort Smith to Bella Vista.

“Two years ago there were four times that number. We were getting new listings each week. That slowed to nearly nothing from the spring through August and since September we have started to see more of bank-owned listings hit the market,” Long said.

He closed a foreclosure property sale in Bentonville late last month. Long said the buyer paid list price of $112,000 for the home that was listed just seven days.

“We wrote an offer sight unseen and took it with us to the showing. This buyer said she had lost out on two other deals and she was taking no chances this time. The foreclosures are not staying on the market long, especially those that are competitively priced. We have no trouble moving these properties,” Long added.

RealtyTrac reports 317,171 U.S. properties had foreclosure filings in the third quarter. Activity is down 16% from a year ago but up 0.42 % from the previous quarter — the first quarterly increase since the third quarter of 2011. The quarterly increase in overall foreclosure activity was driven by a 2% increase in default notices, and a 7% quarterly increase in scheduled foreclosure auctions. Bank repossessions declined 12% from the previous quarter.

“September foreclosure activity was back to pre-housing bubble levels nationwide, in large part thanks to a continued slide in bank repossessions,” said Daren Blomquist, vice president at RealtyTrac. “However, a recent rise in scheduled foreclosure auctions in many markets across the country shows lenders are continuing to clean house of lingering delinquent loans. This rise in scheduled auctions foreshadows a corresponding rise in bank repossessions and auction sales to third party buyers in the coming months.”

Arkansas ranks near the bottom on the national scale (45) in total foreclosure activity in the third quarter. There were 308 homes receiving foreclosure filing in the quarter across the Natural State. The pace is down 43.78% from the second quarter and 68% lower than a year ago.

AVERTING FORECLOSURE
The Department of the Treasury reports 1 in 17 homeowners are behind on their mortgages as of Sept. 24. For that reason the government recently chose to extend the Making Home Affordable Program through Dec. 31, 2016.

Since launched in 2009, Making Home Affordable (HAMP) has helped more than 1.5 million families nationwide avert foreclosure. From those approved for modifications roughly 1 million are still active, more than 460,000 of them have been disqualified. About 35,500 of those loans have been paid off, according to the most recent report by the Treasury Department.

“As the economy continues to heal from the Great Recession, many homeowners still struggle to make their mortgage payments,” said Deputy Treasury Secretary Sarah Bloom Raskin. “The good news is that help is still available. This new public sevice campaign is our latest effort to raise awareness of the free government resources available through Making Home Affordable to assist struggling homeowners in avoiding foreclosure.”

In the recent quarter 88,250 homeowners had forebearance actions begun on their loans, that was 6% lower than the prior quarter. Modifications under the Treasury Department’s FHA and Rural Development Programs totaled 9,807 in the recent quarter. The agency said these modification programs for lower income families rose 68% from a year ago.