ARKANSAS FORECLOSURE HELP
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Arkansas Foreclosure Statute Laws
Both judicial and non-judicial foreclosures are available in Arkansas.Primary Security Instruments in Arkansas are Deed of Trust and Mortgage. The timeline for foreclosures are typically 120 days. Right of Redemption and Deficiency judgments are sometimes allowed.
In Arkansas, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process. However, an appraisal of the property must be made prior to the schedule date of foreclosure.
Judicial Foreclosure Procedures:
- In any foreclosure under a mortgage or deed of trust in Arkansas, the property must sell for not less than two-thirds of the appraised value. If it does not, then it may be offered for sale again within twelve (12) months.
- The second sale may be to the highest bidder without reference to the previous appraisal.
- Sales of real property under court order will be on a credit of not less than three (3) months, but not more than six (6) months, or on installments to not more than four (4) months credit overall.
- To secure payment, a lien will be retained on the property for its price and the purchaser must also give a bond with surety for the amount of the purchase price.
- The lender may bid at the sale by crediting a portion (or all) of the amount the court found was owed to the lender against the sales price of the property purchased at the foreclosure sale.
- If the real estate does not sell for an amount equal to what’s due on the mortgage loan, then the lender may seize other property from the borrower as in an ordinary judgment.
- The borrower has one (1) year from the date of the sale to redeem the property by paying the amount for which the property was sold, plus interest.
Power of Sale Foreclosure Guidelines & Procedures:
- The trustee must record a notice of sale in the office of the recorder of the county where the property is located.
- The mortgagee’s or trustee’s notice of default and intention to sell shall be mailed within thirty (30) days of the recording of the notice by certified mail to the borrower. This includes any borrower of record or of whom the lender has actual notice.
- The notice must also be mailed to anyone who records a Request for Notice that specifically described the mortgagee including its recording information.
- Within five (5) days after the notice is recorded, the trustee must mail, by certified mail, a copy of the notice of sale to each of the people who are parties to the trust deed, except for himself.
- Additionally, the notice of default and intention to sell must appear in a newspaper in the county where the property is located once a week for four (4) consecutive weeks, with the last notice being published not less than ten (10) days prior to the date of the sale.
Said notice of default and intention to sell must contain;
- the names of the parties to the mortgage or deed of trust,
- a legal description of the trust property and, if applicable, the street address of the property,
- the book and page numbers where the mortgage or deed of trust is recorded or the recorder’s document number,
- the default for which foreclosure is made,
- the mortgagee’s or trustee’s intention to sell the trust property to satisfy the obligation, including, in conspicuous type, a warning as follows: “YOU MAY LOSE YOUR PROPERTY IF YOU DO NOT TAKE IMMEDIATE ACTION” and
- the time, date, and place of sale.
- Any person including the mortgagee (lender) may bid at the sale, except the trustee, who may bid on the behalf of the beneficiary (lender) but not for himself or herself in deed of trust sales.
- The high bidder must pay the price bid at the time of sale, or within ten (10) days. The lender may bid by canceling out what it is owed on the loan, including unpaid taxes, insurance, costs or sale and maintenance, but for cash for any higher price.
- The trustee may postpone the sale by public proclamation at the time, place and date last appointed for sale, up to seven (7) days past the original date, but if for a longer time, then the whole notice procedure must be performed a second time, including the sixty (60) day wait.
- Once the sale is complete, the proceeds will go to the pay for the expenses of the foreclosure sale, then toward the obligations secured by the trust deed that was foreclosed and then to junior lien holders in order of their priority.
- The original borrower is entitled to receive any remaining funds.
- The successful bidder receives a trustee’s deed.
- The lender may sue the borrower for a deficiency within twelve (12) months of a power of sale clause foreclosure.
- The lender may sue for (1) the difference between the foreclosure sale price and the balance due on the loan, or (2) the balance due on the loan minus the fair market value of the property, whichever is less.
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