What is Foreclosure in Jacksonville, Arkansas?
Foreclosure is the legal process by which the lender in a mortgage arrangement takes possession of the property (normally a house) that secured the loan. This is done when the Jacksonville, Arkansas debtor has repeatedly failed to make their payments. Foreclosure normally requires the house to be sold at an auction. Normally, banks want to rid themselves of the property as soon as they can, in order to collect 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 reasonable effort to get a decent price at the auction, and that any proceeds above the balance of the mortgage go back to the borrower. In many 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 borrower 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 Jacksonville, Arkansas attorney to see if this state is one of them.
How Can I Avoid Foreclosure in Arkansas?
First and foremost, you should not ignore the possibility of foreclosure. Failing to respond to collection calls from your lender will not make the problem go away. As unpleasant as this might seem, you should stay in contact with your creditor, and be straightforward with them. You should keep in mind that banks normally don't want to take your Jacksonville home. They aren't in the real estate business, and expect to make money through interest on the loan, not by selling your house. If you are up-front with them early on, they will probably make a reasonable effort to accommodate your financial system if it will keep you from defaulting.
If no deal can be worked out, or the mortgage payments have become prohibitive, you might consider a "short sale". While the lender has to consent to it, many will take a moderate loss if it means avoiding foreclosure (which lenders typically treat as a last resort). This allows you to sell the house for whatever price it can fetch on the current market, and hand the proceeds over to the bank. If the sale nets less than the balance, some or all of the deficiency might be forgiven. You may also consider a "short refinance" which allows a chunk of the debt to be forgiven, and lets you refinance the rest.
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How Can A Jacksonville, Arkansas Attorney Help?
If you are facing the possibility of foreclosure, a good Jacksonville, Arkansas real estate attorney can help. At the very least, they will be able to inform you of your legal options.