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Arkansas Foreclosure Law
Arkansas foreclosures are handled both in court and out of
court. A typical out-of-court foreclosure can last a little less
than three months.
Pre-foreclosure Period
In Arkansas, foreclosures can be handled either in or out of
the court system, but the lender must have an appraisal of the
property taken prior to the scheduled foreclosure date. In a
court-handled foreclosure, the court determines the amount in
default and gives the borrower a short time to pay the debt to
the lender.If the borrower fails to pay the full amount owed
within that timeframe, then the property goes up for sale,
usually about 30 days after the court considers the matter.
Power-of sale clauses in mortgages allow lenders to foreclose on
property in default without going through the court system. To
begin the foreclosure process out of court, the lender will have
a notice of default filed with county records. The borrower can
stop the foreclosure process by paying off the amount owed any
time before the foreclosure sale.
Notice of Sale / Auction
For power-of-sale foreclosures handled out of the court
system, the notice of default filed by the lender also serves as
the notice of sale, as it contains all the information pertinent
to the sale (time, location, property description, etc.). Within
30 days of this notice of default being recorded, a copy of the
notice and the lender's intention to sell is mailed to the
borrower. The lender also posts a notice of sale in the office
of the county recorder. The notice is published in a local
newspaper for four consecutive weeks, with the final notice
being published at least 10 days prior to the sale. At the sale,
which is run by an auctioneer, anyone can bid on the property,
with the exception of the trustee, who may only bid on behalf of
the lender. The highest bidder is awarded ownership of the
property and must pay the full bid price within 10 days of the
sale. For out-of-court foreclosures, the borrower has no right
to redeem the property after the sale. The property must sell
for no less than two thirds of the appraised value. If this
value is not met, the property must be offered for sale again
within 12 months of the original sale date.If this occurs, the
second sale awards the property to the highest bidder,
regardless of the appraisal price. If the property is foreclosed
through the courts, the borrower has one year from the date of
the sale to redeem the property, provided that they pay the
amount of the purchase price from the auction plus interest.
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