Arkansas has been one of the states hardest hit by the foreclosure crisis. In fact, in some areas of the state, nearly one in four homes is in some stage of foreclosure. If you’re concerned about foreclosure and don’t know what to do, don’t worry – help is available.
In this post, we provide an overview of Arkansas’s foreclosure process and what you need to do if you find yourself facing foreclosure. Keep reading to learn more.
What is Foreclosure?
Foreclosure is a legal process whereby a lender attempts to recover the amount owed on a delinquent mortgage by selling the property and securing the loan. In Arkansas, foreclosure can be either judicial or non-judicial. Judicial foreclosure is conducted through the court system, and non-judicial foreclosure does not involve the court system.
How to Avoid Foreclosure
The best way to avoid foreclosure is to keep up with your mortgage payments. However, if you fall behind on your payments, there are a few things you can do to avoid foreclosure.
Talk to Your Lender
Reach out to your lender as soon as possible and explain your situation. Many lenders are willing to work with borrowers who are struggling to make their payments. You may be able to work out a payment plan or modification that will make your payments more affordable.
Sell Your Home
Consider selling your home. While this may be a difficult decision, it may be the best option if you can’t afford your mortgage payments. Selling your home will allow you to pay off your mortgage and avoid foreclosure.
Short Sale Your Home
A short sale occurs when you sell your home for less than the amount you owe on your mortgage. This option may be available if your home is worth less than what you owe on your mortgage.
Refinance Your Loan
Finally, you may be able to refinance your loan. This involves taking out a new loan with different terms, such as a lower interest rate or a longer repayment period. Refinancing can make your payments more affordable and help you avoid foreclosure.
The Types of Foreclosure
There are two types of foreclosure in Arkansas: judicial and non-judicial.
Judicial Foreclosure
Judicial foreclosure is conducted through the court system. The lender must file a lawsuit against the borrower and obtain a court order to foreclose on the property. Once the order is obtained, the property is auctioned off to the highest bidder.
Non-Judicial Foreclosure
Non-judicial foreclosure does not involve the court system. The lender can foreclose on the property without filing a lawsuit or obtaining a court order. Once the lender has decided to foreclose, the property is typically auctioned off to the highest bidder.
How to Stop or Delay Foreclosure
If you’re facing foreclosure, there are a few things you can do to stop or delay the process.
Negotiate with Your Lender
You can try to work out a payment plan or modification with your lender. As we mentioned earlier, many lenders are willing to work with borrowers who are struggling to make their payments. You may be able to arrange a payment plan that makes your payments more affordable or modify your loan to make it more manageable.
File for Bankruptcy
Filing for bankruptcy will stop the foreclosure process. However, it’s important to note that filing for bankruptcy will not make your mortgage payments go away – you will still be responsible for making them.
Request a Mediation Hearing
If you’re facing foreclosure, you have the right to request a mediation hearing. A mediation hearing is a meeting between the borrower and lender where both parties attempt to negotiate a resolution to the foreclosure. If you’re facing foreclosure, we recommend reaching out to an attorney who can help you navigate the mediation process.
What to Do If You Can’t Avoid Foreclosure
When you can’t avoid foreclosure, you can do a few things to prepare for it.
If you haven’t already, reach out to a housing counseling agency. A housing counselor can help you understand your options and make a plan for after the foreclosure.
Then, start looking for a new place to live. If you’re facing foreclosure, you will likely have to move out of your home. Start looking for new housing as soon as possible so you can be prepared to move when the time comes.
Lastly, make arrangements for your belongings. If you have to move out of your home, you’ll need to make arrangements for your belongings. You may want to consider renting a storage unit or asking a friend or family member if they can store some of your things.
The Process of Foreclosure in Arkansas
If you’re facing foreclosure in Arkansas, it’s essential to understand the process. As we mentioned earlier, there are two types of foreclosure in Arkansas: judicial and non-judicial.
Judicial Foreclosure
If you’re facing judicial foreclosure, the process will be as follows:
- The lender will file a lawsuit against the borrower.
- The court will schedule a hearing.
- At the hearing, the judge will decide whether or not to grant the foreclosure.
- If the judge decides to grant the foreclosure, they will issue an order allowing the property to be auctioned off.
- The property will be auctioned off to the highest bidder.
Non-Judicial Foreclosure
If you’re facing non-judicial foreclosure, the process will be as follows:
- The lender will send a notice of default to the borrower.
- After a certain period of time, the lender will send a notice of sale to the borrower.
- The property will be auctioned off to the highest bidder.
The Consequences of Foreclosure
Foreclosure can have several negative consequences. First and foremost, it will damage your credit score, making it difficult to get a loan in the future. Additionally, foreclosure can lead to homelessness. If you’re facing foreclosure, we recommend that you reach out to a housing counseling agency for help finding new housing.
Avoid Foreclosure by Selling Your Home for Cash
If you’re on the verge of foreclosure, you may be able to avoid it by selling your home. Selling your home will allow you to pay off your mortgage and prevent the negative consequences of foreclosure altogether. If you’re interested in selling your home, we can help!
At Favor Home Solutions, we buy houses in any condition and provide cash offers so you can get the money you need quickly and hassle-free. Let us assist you during this trying time; get in touch with us now for additional information!
