Foreclosure & Alternatives Law
One of the biggest fears for homeowners is having their home foreclosed upon; however, unavoidable life circumstances sometimes mean that a homeowner will become late on mortgage payments. When a homeowner doesn't pay the mortgage on time, foreclosure is possible. For homeowners in Arkansas who are past due on the mortgage, the foreclosure process can move very quickly.
Arkansas law allows for non-judicial and judicial foreclosures. The type of foreclosure used depends largely on the clauses in the mortgage paperwork. If there is a power of sale clause, the home can be sold using the non-judicial method of foreclosure. If there isn't a power of sale clause, the home must go through the judicial method of foreclosure.
A non-judicial foreclosure in Arkansas can only happen if there is a legal clause that pre-authorizes the sale of the home in the event of a mortgage default. If the clause contains information about the sale, such as a time, place, and terms, that process can be followed. There are still some other things the mortgage holder must do to comply with state laws.
Notification in the local newspaper must occur at least one time per week for four consecutive weeks. The final week of those four must be published at least 10 days prior to the sale. Additionally, a trustee has to record a notice of sale in the county in which the property is located. A copy of that notice must be given to each of the people in the trust deed via certified mail. That must occur within five days of the notice being recorded.
When the notice is mailed, there is a variety of information that must be included. This includes a warning that says, “YOU MAY LOSE YOUR PROPERTY IF YOU DO NOT TAKE IMMEDIATE ACTION.” It must include all names on the mortgage, the address of the property, the legal description, and the location of the mortgage deed recording. It also has to include the time of sale, date of sale, place of sale, default information, and any other applicable information.
Arkansas allows the trustee to postpone the sale of the property for up to seven days. If the postponement is longer, the entire process restarts. This means there would be a 60 day wait. The postponement must be made by public proclamation.
If the property goes through a judicial foreclosure, the court will decree the amount the homeowner owes. The homeowner will be given a short period of time to pay. If the homeowner doesn't do that, the process of the sale moves forward. This process is the same as a non-judicial foreclosure. That means the property has to be advertised in the newspaper for four consecutive weeks at a rate of at least once per week in the newspaper where the property is located.
A home that is sold at a judicial foreclosure sale can be redeemed by the homeowner who lost the property within the 12 months following the sale. Those first 12 months are also the term in which the lender can sue the homeowner for a deficiency. The deficiency is the lesser of the balance due on the loan minus the fair market value of the home or the difference between the balance of the loan and the sale price.
Foreclosure in Arkansas can move as quickly as 70 days with an average of 120 days. That doesn't leave much time for homeowners to learn how they can save their home. Seeking assistance from a lawyer familiar with foreclosures in Arkansas might help them determine how to stop the foreclosure.