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 West Memphis, 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 every state, including Arkansas, borrowers have the option to go through foreclosure by judicial sale. This means that the auction will be supervised 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 whole balance will be covered, as well as the odds that there will be some money leftover for the debtor). In numerous states, original mortgages (as opposed to refinanced loans) are "non-recourse" loans, meaning that the most the lender can collect is whatever the foreclosed property sells for. The bank cannot go after the debtor for the balance, if the sale nets less than the amount due. You should consult a attorney in West Memphis, Arkansas to learn the details of the law here. You should also know that this rarely applies to loans that have been refinanced.
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. You should keep in mind that banks typically don't want to take your West Memphis 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 prevent you from defaulting.
If you believe that foreclosure is imminent, there are some other avenues. For example, you may be able to engage in a "short sale," which sometimes allows you to sell your house for whatever amount you can receive, give the proceeds to the lender, and walk away free of your mortgage debt, even if the sale netted less than the balance of the mortgage. There is also the option of a "short refinance," which forgives a substantial portion of your mortgage debt, and refinances the rest.
How Can A West Memphis, Arkansas Attorney Help?
If you are worried about foreclosure, a good West Memphis, Arkansas real estate attorney may be able to help. A attorney can increase your chances of keeping your home, and help minimize the financial impact if keeping it proves impossible.