Foreclosure is the legal procedure by which the lender in a mortgage arrangement takes possession of the property (typically a house) that secured the loan. This is done when the Fort Smith, Arkansas debtor has repeatedly failed to make their payments. Foreclosure typically requires the house to be sold at an auction. Typically, banks want to rid themselves of the property as soon as they can, in order to gather as much money as possible.
In all states in the U.S., including Arkansas, foreclosure by judicial sale is allowed. Under this system, the sale is overseen by a court of law, to ensure that the bank makes a good effort to get a reasonable price at the auction, and that any proceeds above the balance of the mortgage go back to the borrower. In various states, mortgages which have not been refinanced are "non-recourse loans." This means that, in the event of default, the bank can take ownership of the house and sell it; but if the sale price happens to be less than the balance of the mortgage, the lender cannot go after the debtor for the remainder. Because of this, some people have found that their best option is to simply walk away from the home if the mortgage is more than the house is worth. You should talk with a Fort Smith, Arkansas lawyer to see if this state is one of them.
How Can I Avoid Foreclosure in Arkansas?
First, and most importantly, you should not dismiss the issue. Failing to respond to foreclosure calls from your lender will not make a issue go away. You should stay in touch, and be forthright with, your creditor as much as possible. One should remember that banks usually don't want to take your house in Fort Smith. They issued your mortgage expecting to earn a profit on the interest. Taking possession of, and selling, your house is a last resort for them. Therefore, if you are forthright with them about your financial situation, they are likely to make reasonable accommodations to keep you from defaulting.
If you can't work anything out with your lender, or have become totally unable to make any mortgage payments, a "short sale" might be a good option. This allows you to sell your house for whatever price it can get, and hand the proceeds over to the lender. If the sale price is less than the balance of the loan, the rest of the debt may be forgiven. A "short refinance" may also be an option in some cases. This allows you to have some part of the debt forgiven, while refinancing the rest.
How Can A Fort Smith, Arkansas Attorney Help?
If you are faced with the possibility of foreclosure in Fort Smith, Arkansas, an lawyer may be able to help. At the very least, he or she can advise you of your legal options.