Arkansas Home Foreclosure Laws

Read about important features of Arkansas foreclosure laws and procedures.

When you bought your home, the lender most likely required you to sign a mortgage. This document gives the lender the right to sell the property through a process called "foreclosure" if you fail to make the loan payments. The lender then uses the proceeds from the foreclosure sale to pay off your debt.

In about half of the states, the lender (or the subsequent loan owner, called an "investor") must file a lawsuit in court to foreclose. This kind of foreclosure is called a "judicial" foreclosure. In the remaining states, the lender can choose to use an out-of-court process. This process is called a "nonjudicial" foreclosure.

In Arkansas, most foreclosures are nonjudicial. In a nonjudicial foreclosure, the lender must carefully follow a series of steps described in the state statutes to complete the process. To get details about those steps in Arkansas, read on.

Preforeclosure Notice in Arkansas

At least ten days before starting a nonjudicial foreclosure in Arkansas, the lender has to mail a notice to the borrower. This notice must include information about the availability of loan modification assistance, along with information about the loan, like a payment history showing the date of default. (Ark. Code Ann. § 18-50-103).

Arkansas Nonjudicial Foreclosure Procedures

To officially start the foreclosure, the lender records a notice of default and intention to sell with the county recorder. The lender then mails a copy of the notice to the borrower, and various other parties, by both certified and first-class mail within 30 days after recording the notice. (Ark. Code Ann. § 18-50-104).

Also, the lender has to:

  • publish the notice in a newspaper in general circulation in the county where the property is located (or a newspaper of general statewide publication) once a week for four consecutive weeks, with the last publication no more than ten days before the sale date
  • post the notice in a place in the county courthouse where foreclosure sales are usually advertised and conducted, and
  • use a third-party to advertise the notice on the Internet. (Ark. Code Ann. § 18-50-105).

The sale can’t happen until at least 60 days have passed since the recordation of the notice of default. (Ark. Code Ann. § 18-50-104).

Right to Reinstate the Loan Before the Foreclosure Sale in Arkansas

"Reinstating" is when you catch up on the defaulted mortgage's missed payments, plus fees and costs, to stop a foreclosure.

Under Arkansas law, you can reinstate the mortgage at any time after the lender records the notice of default and before the sale. (Ark. Code Ann. § 18-50-114).

No Post-Sale Redemption Right in Nonjudicial Foreclosures

In some states, the borrower can redeem the home within a specific amount of time after the foreclosure. But in Arkansas, foreclosed homeowners don’t get the right to redeem the property after a nonjudicial foreclosure. (Ark. Code Ann. § 18-50-108).

Deficiency Judgment Laws in Arkansas

When the total mortgage debt exceeds the foreclosure sale price, the difference is called a "deficiency." Some states allow the foreclosing lender to seek a personal judgment, which is called a "deficiency judgment," against the borrower for this amount. Other states prohibit deficiency judgments with what are called anti-deficiency laws.

In Arkansas, the lender may sue you for a deficiency judgment following a nonjudicial foreclosure if it does so within 12 months after the foreclosure sale. The amount of the judgment is limited to the lesser of:

  • your indebtedness minus the property's fair market value or
  • your indebtedness minus the sale price of the property. (Ark. Code Ann. § 18-50-112).

When to Seek Counsel

If you want to get more information about foreclosure procedures in Arkansas or find out about potential defenses to a foreclosure, consider talking to a lawyer. Also, consider making an appointment to speak to a HUD-approved housing counselor if you want to learn about different foreclosure avoidance options and how to apply for one.

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