Arkansas Foreclosure Process and Laws


Quick Facts About the Foreclosure Process in Arkansas

Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: Yes
Primary Security Instruments: Deed of Trust, Mortgage
Timeline: Typically 120 days
Right of Redemption: Varies

Deficiency Judgments Allowed: Varies

Foreclosure of mortgages in default in the State of Arkansas may be done through a judicial or a non-judicial process. During any foreclosure, the property most be sold for at least 2/3 of the appraised value. If not, it can be offered again for sale within 12 months to the highest bidder.

Judicial Foreclosure
When the borrower is unable to pay his debt within a time period given by the court, the property mortgaged is now up for sale. Sales of property will be on credit not less than three months, but not more than six months, or by instalment of not more than four months. A lien will be retained on the property in order to ensure payment.

The borrower has one year to match the sale price of the property plus interest if he wants to regain his property.

Non-Judicial Foreclosure

When the power of sale is included in the deed of trust, this means that the borrower has pre-authorized the lender to sell the property to pay off a balance on a loan during a default. The sale of the property is done by the lender or a representative, usually referred to as a trustee.

Power of Sale Foreclosure Guidelines
If a deed of trust contains a power of sale but without any specifications of time, date or terms of sale, then the non-judicial sale foreclosure is done by:

Making a record of a notice of sale must be done in the office of the recorder in the county where the property is located. The notice of default and intention to sell the property must be within 30 days of the recording of the notice.

Within five days after the notice is recorded, a copy of the notice must be sent to the parties involved in the trust deed. The notice of default and sale must also appear in the newspaper once a week for four consecutive weeks in the county newspaper, the last notice should not be less than 10 days prior to the day of sale. All pertinent information must be included in the notice of default, as well as a warning that the borrower may lose his property without any immediate action.

Anyone may bid for the property including the lender. The property goes to the highest bidder, who must pay within 10 days to obtain the property. The lender can also bid by cancelling out the debt in the loan.

Postponement of the sale can be done up to 7 das of the original date without any changes, but if it is longer, the whole notice of default procedure must be repeated. Upon completion of the sale, the money will pay for the expenses of the foreclosure sale, to the trust deed and to junior lien holders. The rest goes to the original borrower.

For a deficiency, the lender may sue within 12 months of a power of sale. It can be for the difference between balance due and foreclosure sale price or balance due minus fair market price of the property.

Foreclosure Avoidance Counseling

HUD-approved housing counseling agencies are available to provide you with the information and assistance you need to avoid foreclosure. As part of President Obama’s comprehensive Homeowner Affordability and Stability Plan (HASP), you may be eligible for a special Making Home Affordable loan modification or refinance, to reduce your monthly payments and help you keep your home.

If you need help understanding the Making Home Affordable programs, you can use this search tool to find a counseling agency in your area that will provide you with free foreclosure prevention services. If you are eligible for the loan modification or refinance program, the counselor will work with you to compile an intake package for your servicer.

Foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies working in partnership with the Federal Government. These agencies are funded, in part, by HUD and NeighborWorks® America. There is no need to pay a private company for these services.

Little Rock Field Office

Dept. of Housing and Urban Development
425 West Capitol, Suite 1000

Little Rock, AR 72201

Phone: (501) 918-5700
Fax: (501) 324-6142

Alice Rufus
Field Office Director

Office Hours: 8:00 a.m. to 4:30 p.m.
Monday through Friday