Arkansas Foreclosures: Still on the Rise in Most of the State
The Arkansas economy seemed to have a decent start to 2011. The economic indicators were positive, as the monthly survey of 
business owners and managers came out with a business index of 59 in January, up from 57 in December. Anything above 50 means the economy is expanding. New orders were solidly up and inventories signaled future growth. The economy was increasing based on the manufacturing industry instead of the usual source, the agriculture industry, so there still is a period of adjustment. In general, Arkansas foreclosures were down, by more than 5.1% from the previous January (2010) and lower than the national average. Unemployment was still quite high at over 9% and taxable sales were stuck at the 0.7% decline that started in December 2010. Even with all of the negative numbers, officials and mortgage experts are hopeful that actions taken recently will still stimulate confidence in the industry and the upswing everyone has been waiting for nationally and locally.
Arkansas cities saw mortgage defaults, seizures and sheriffs’ sales on the rise. With the high unemployment rate, state residents have been defaulting on loans in record numbers. Since loan modification is not available to those who cannot afford some payment every month, the only option in many situations is default. Foreclosure follows and the ensuing sheriff’s sales only serve to continue the low home values. The low home sales decrease the options for refinancing because the mortgage companies are underfunded, and the cycle continues, seemingly endlessly in Arkansas. The largest increases were Hot Springs National Park foreclosures, up by 15.38%, and Bella Vista foreclosures which went up by 14.29%. Springdale foreclosures were still high, but in the median increase at 10.71%. Rogers foreclosures and Fayetteville foreclosures had the lowest rise in the state with 5.66% and 5.41% respectively.
Other parts of the state did have decreases in the numbers of foreclosures. Little Rock foreclosures went down by 3.17%. This is credited to it being the state capital. As such, Little Rock has more federal lending institutions, which have been encouraged and 
given incentives by the federal government to increase loans to qualified first-time homebuyers. They also have subsidies for participating in loan modifications for qualified owners who can still make payments, but who have experienced a hardship that resulted in their mortgage being more than 31% of their gross income. Every time a loan modification is successfully completed by a bank, it is one less defaulted mortgage and one less foreclosure filing.
The Arkansas economy had a slow start to the year, and the state as a whole did not have an easy go of it either. There were some strange phenomena of dead birds falling from the sky and fish turning up dead on river banks. The economic situation was aggravated by an unprecedented harsh winter full of record-breaking snowfalls and cold snaps that stretched the state’s already thin budget, until it was working at a loss very early in the year. Unlike most states, Arkansas foreclosures went up in many parts of the state, as did unemployment and home prices. Arkansas is starting the year on a downtrend. To instigate change, the government and business owners, as well as the local and federal mortgage companies, are all working to make the conditions more favorable for both lenders and homebuyers. With all of the work being done locally to help out debtors and potential homebuyers, hopes are high that in the first or second quarter of this year, positive growth will kick in and spread beyond the Little Rock area to the rest of the cities and rural areas of the state.
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