Foreclosure bottleneck easing in Arkansas?
In the first quarter, the foreclosure rate feel around 79 percent from where it was a year ago in the Natural State. Why? Is the economy improving? Are people in dire financial straits suddenly able to pay their mortgages? Have banks resorted to simply giving people their homes for free?
The answers to all those questions is “no.” What did happen was a decision from the Eastern District of Arkansas, Jonesboro Division, put the brakes on foreclosures in the state. In the chapter 13 bankruptcy case of In Re Johnson, the court found that out-of-state lenders couldn’t properly take homes through the Arkansas non-judicial foreclosure statute if they were not authorized to do business in the state.
Rather than line up to register with the Arkansas Secretary of State’s office (and pay the requisite franchise taxes), J.P. Morgan Chase Bank — and it’s related entities — appealed the decision. J.P. Morgan, of course, was on the receiving end of the Johnson decision.
The appeal was successful on May 11 and the court found that nationally-chartered banks were, in fact, authorized to do business in Arkansas and could take advantage of the non-judicial foreclosure statute. That’s a major decision as the overwhelming majority of foreclosures in this state are of the non-judicial variety — they are less expensive than going through the courts system and typically don’t take as long, either.
You can read the full story on this decision over at The City Wire.
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.