story by Kim Souza
ksouza@thecitywire.com
Between the holidays of Thanksgiving and Christmas, 327 homeowners across the state faced foreclosure threat.
Benton County had 38 households and in Washington County there were 30 homeowners served foreclosure filings in the month of December, according to RealtyTrac.
The number of local foreclosure filings was down more than 40% from November. But, filings rose nearly 12% higher than a year ago in Benton County and jumped 25% in Washington County in the same year-over-year period.
Local real estate experts and economists say the worst of the foreclosure crisis has passed, but there will continue to be more distressed properties making their way back into the market this year in the form of bank-owned properties.
On Wednesday (Jan. 16), there were 260 homes listed as foreclosures for sale in the local Multiple Listing Service, which includes the Fort Smith market.
Jim Long, agent with Crye-Leike Real Estate in Bentonville, said the bank-owned properties coming out of the foreclosure pipeline are still trickling into the local listing service. This time last month there were 276 bank-owned properties in the MLS, and Long said these homes are being sold almost as quickly as they come on the market.
“Investors are lurking, but in most cases these homes are selling in the 10- to 15-day grace period when the bidding process prohibits investors,” Long said.
Northwest Arkansas was a hot bed of foreclosures from 2008 through October 2011. In late 2011, federal litigation stifled the process for hundreds of homeowners whose lenders were based outside of the state.
This moratorium on most foreclosures between October 2011 and April 2012 helped push home prices higher across Northwest Arkansas and the rest of the state. Locally, median home sales prices rose nearly 20% between December 2011 and December 2012, according to MountData.com.
Corelogic reports 11.6% of the state’s homeowners still owe more than their home is worth, which is a precursor for possible future foreclosure.
John Silvia, chief economist with Wells Fargo, says as home prices recover and the unemployment continues to improve the risk of foreclosure should decline for those homeowners still teetering on the edge.
For the full year of 2012, there were 804 foreclosure filings in Benton County and 489 in Washington County. The foreclosure rate was down 36% in Benton County and 45% lower in Washington than in 2011.
It’s important to note the annual comparison period involves a time when litigation stalled the foreclosure process from October 2011 to April 2012.
Daren Blomquist, vice president at RealtyTrac, noted in the report: “Although we are comfortably past the peak of the foreclosure problem nationally, 2013 is likely to be book-ended by two discrete jumps in foreclosure activity. We expect to see continued increases in judicial foreclosure states near the beginning of the year as lenders finish catching up with the backlogs in those states, and another set of increases in some non-judicial states near the end of the year as lenders adjust to the new laws and process some deferred foreclosures in those states.”
Arkansas is a non-judicial state, which means most foreclosures can be completed without a court hearing or judge’s ruling. Homes are auctioned on the courthouse steps each week following the posted status once the loan is at least 60 days in arrears. The average timeframe to complete the foreclosure process in the fourth quarter of 2012 in Arkansas was 218 days, down from 240 days in the previous quarter.
Across the nation, there were 1.8 million properties encumbered by foreclosure in 2012, down 3% from 2011 and down 36% from 2010.
2012 FORECLOSURE FILINGS
Northwest Arkansas (Properties in the foreclosure process)
Benton County
2012: 804
2011: 1,253
2010: 3,925
Washington County
2012: 489
2011: 890
2010: 3,059