ForeclosuresToGo
Learning Center | Arkansas Foreclosure Laws

Questions
How are mortgage liens treated in Arkansas?
How are Arkansas mortgages foreclosed?
What are the legal instruments that establish an Arkansas mortgage?
How long does it take to foreclose a property in Arkansas?
Is there a right of redemption in Arkansas?
Are deficiency judgments permitted in Arkansas?
What statutes govern Arkansas foreclosures?

Answers

How are mortgage liens treated in Arkansas?

Arkansas is generally moving to atitle theory state where the property title remains in the hands of thelender until payment in full occurs for the underlying loan. For many years, Arkansas operated primarily through thejudicial foreclosure mode under thelien theory. Both foreclosure methodologies are available to lenders in Arkansas.  The document that secures the title in Arkansas is called adeed of trust, but is sometimes referred to as atrustee's deed ormortgagees' deed but may also be referred to simply as amortgage. The instrument that represents the borrower’s personal promise to pay the loan is known as apromissory note.

top

FREE 7-DAY TRIAL!

You're only seconds away from searching foreclosures FREE for 7 days with America's largest and most trusted database.

It's fast and easy!

How are Arkansas mortgages foreclosed?

One primary method of foreclosure in Arkansas involves what is known asnon-judicial foreclosure. When thedeed of trust is initially signed it will usually contain a provision called apower of sale clause, which upon default allows sale of the property in order to satisfy the underlying loan. Arkansas uses the typicaldeed of trust where thetrustee acts as a representative of the lender and/or is the holder of thedeed of trust. Foreclosure sales will typically occur in the form of an auction at the courthouse. Because this is a non-judicial remedy there are very stringent notice requirements and the legal documents are required to contain thepower of sale language in order to use this type of foreclosure method.


Power of Sale Notice Requirements:

  1. Prior to initiating a foreclosure the lender must record anotice of default andan intention to sell in the county in which the property is located. There must be a current loan default and only certain parties can serve as trustees, including attorneys and others. At least sixty (60) days must elapse after the filing before any further foreclosure action can occur.
  2. Thenotice of default and intention to sell must be mailed within thirty (30) days of the date of recording by certified mail and the notice must contain property information, the date of the proposed sale, and other pertinent information. The lender must then publish the notice of the scheduled foreclosure sale in the county newspaper in which the property is located once a week for four (4) consecutive weeks before the sale. The final publication must occur within ten (10) days of the sale. The notice must also be posted using a third-party posting service at the courthouse and the lender must also publish notice on the Internet by a third-party Internet posting service.
  3. Foreclosure sales must take place on the between 10AM and 4PM at the courthouse or at the subject property and cannot be held on Saturday, Sunday or a legal holiday. The trustee will auction the property to the highest bidder at the courthouse steps or at the property location. No bid will be accepted unless it is at least 2/3 of the indebtedness under the mortgage loan. The sale may be postponed and no further notice need to be given unless the postponement is for more than thirty (30) days.

In Arkansas, the lenders can also go to court in what is known as ajudicial foreclosure proceeding where the court must issue a final judgment of foreclosure. If thedeed of trust does not contain thepower of sale language or a standardmortgage is used the lender usually must seekjudicial foreclosure. The property is then sold as part of a publicly noticed sale. A complaint is filed in circuit court along with what is known alis pendens. Alis pendens is a recorded document that provides public notice that the property is being foreclosed upon.

top

What are the legal instruments that establish an Arkansas mortgage?

The documents are known as themortgage,promissory note, and in a commercial transaction, asecurity agreement. Sometimes the mortgage document is combined with thesecurity agreement. Alternatively, amortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in thepromissory note.

top

How long does it take to foreclose a property in Arkansas?

Depending on the timing of the various required notices, it usually takes approximately 120 days to effectuate an uncontestednon-judicial foreclosure. This process may be delayed if the borrower contests the action in court, seeks delays and adjournments of sales, or files forbankruptcy.

top

FREE 7-DAY TRIAL!

You're only seconds away from searching foreclosures FREE for 7 days with America's largest and most trusted database.

It's fast and easy!

Is there a right of redemption in Arkansas?

Once adeed of trust underpower of sale is issued to a successful bidder at the foreclosure sale, Arkansas has nostatutory right of redemption, which would allow a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs. There is a one (1) year right of redemption forjudicial foreclosures; however this right can be waived initially in the loan documents.

top

Are deficiency judgments permitted in Arkansas?

Yes, adeficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount that the underlying mortgage secures. Under the power of sale statute (Arkansas Statutes, Title 18-50-112) the lender must seek a deficiency judgment within twelve (12) months after the foreclosure sale. The deficiency cannot exceed the lesser of the amount due less fair market or the amount due less the amount of the sale.

top

What statutes govern Arkansas foreclosures?

The laws that govern Arkansas foreclosures are found in of Arkansas Code, Title 18 (Property), Subtitle 4 (Mortgages And Liens) Chapter 49 (Enforcement of Mortgages—which deals with Judicial foreclosures) or Chapter 50 which deals with Statutory (Non-judicial) Foreclosures. To view these statutes on the Web, you can visit:

http://170.94.58.9/NXT/gateway.dll?f=templates&fn=default.htm&vid=blr:code (You must click on left hand index to find applicable statute sections)


top
Home Login Contact About Lost Access Code Email Alerts FAQs
Privacy Policy & Security Statement Terms & Conditions of Service