What is Foreclosure in Sherwood, Arkansas?
Foreclosure is the legal process 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 Sherwood, 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 collect as much money as possible.
In every state, including Arkansas, borrowers have the option to go through foreclosure by judicial sale. This means that the auction will be overseen by a court, to make sure that the bank makes an effort to get as high a price as possible (to increase the chances that the entire balance will be covered, as well as the odds that there will be some money leftover for the borrower). In many states, original mortgages are considered non-recourse loans, meaning that if the house is foreclosed and sold for less than the debtor owes, the bank cannot go after the debtor for the remainder. You should consult with an attorney in Sherwood, Arkansas to see if this is the case. However, this typically doesn't apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Arkansas?
First of all, you shouldn't ignore the problem. You should stay in contact with your bank, and be forthright with them. Ignoring the issue will not make it go away. It is important to remember that banks don't really want to own homes in Sherwood. In issuing a mortgage, they expect to make a profit through interest on the loan, and they'd prefer to continue collecting from you. Therefore, they're likely to make reasonable accommodations to your financial situation if it will enable you to keep paying them in the long run.
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 usually 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 might also try a "short refinance" which allows a piece of the debt to be forgiven, and the rest refinanced. This allows the bank to wash its hands of the matter, while taking a relatively small loss, and allows the homeowner to keep their home.
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How Can A Sherwood, Arkansas Attorney Help?
If you are facing foreclosure, a good Sherwood, Arkansas real estate attorney can help. While keeping your home might not always be possible, a lawyer can increase your odds of success, and help you minimize the negative impact if you do end up losing your home.