Arkansas Foreclosure Laws
Arkansas Foreclosure Laws
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Arkansas Foreclosure is both Judicial and Non-Judicial. Judicial is most commonly used.
Qualifications of trustee - Appointment of successor trustee.
A. A trustee of a deed of trust shall be any:
1. Attorney who is an active licensed member of the Bar of the Supreme Court of the State of Arkansas or law firm among whose members includes such an attorney;
2. Bank or savings and loan association authorized to do business under the laws of Arkansas or those of the United States;
3. Corporation which is an affiliate of a bank or savings and loan association authorized to do business under the laws of Arkansas or those of the United States, which is either an Arkansas bank or a registered out-of-state bank which maintains a branch in the State of Arkansas; or
4. Agency or authority of the State of Arkansas where not otherwise prohibited by law.
Arkansas foreclosure law states that the beneficiary may appoint a successor trustee at any time by filing a substitution of trustee for record with the recorder of the county in which the trust property is situated. The new trustee shall succeed to all the power, duties, authority, and title of the original trustee and any previous successor trustee.
The beneficiary may, by express provision in the substitution of a trustee, ratify and confirm actions taken on its behalf by the new trustee prior to the recording of the substitution of the trustee. The substitution shall identify the deed of trust by stating the names of the original parties thereto, the date of recordation, and the book and page where recorded or the recorder's document number. The substitution shall also state the name of the new trustee and shall be executed and duly acknowledged by all the beneficiaries or their successors in interest. A mortgagee may delegate his or her powers and duties under this chapter to an attorney-in-fact, whose acts shall be done in the name of and on behalf of the mortgagee. The qualifications for an attorney-in-fact shall be the same as those for a trustee. The appointment of an attorney-in-fact by a mortgagee shall be made by a duly executed, acknowledged, and recorded power of attorney, which shall identify the mortgage by stating the names of the original parties thereto, the date of recordation, and the book and page where recorded or the recorder's document number. A substitution of trustee or power of attorney shall be recorded before any trustee's or mortgagee's deed executed by the substituted trustee or attorney-in-fact is recorded
Conditions to exercise of power.
Arkansas foreclosure law states that a trustee or mortgagee may not sell the trust property unless:
1. The deed of trust or mortgage is filed for record with the recorder of the county in which the trust property is situated;
2. There is a default by the mortgagor, grantor, or other person owing an obligation, the performance of which obligation is secured by the mortgage or deed of trust or by their successors in interest with respect to any provision in the mortgage or deed of trust that authorizes sale in the event of default of the provision;
3. The mortgagee, trustee, or beneficiary has filed for record with the recorder of the county in which the trust property is situated a duly acknowledged notice of default and intention to sell.
4. No action has been instituted to recover the debt or any part of it secured by the mortgage or deed of trust or, if such action has been instituted, the action has been dismissed; and
5. A period of at least sixty (60) days has elapsed since the recording of the notice of default and intention to sell.
Contents of notice - Persons to receive notice.
A. The mortgagee's or trustee's notice of default and intention to sell shall set forth:
1. The names of the parties to the mortgage or deed of trust;
2. A legal description of the trust property and, if applicable, the street address of the property;
3. The book and page numbers where the mortgage or deed of trust is recorded or the recorder's document number;
4. The default for which foreclosure is made;
5. The mortgagee's or trustee's intention to sell the trust property to satisfy the obligation, including in conspicuous type a warning as follows: "YOU MAY LOSE YOUR PROPERTY IF YOU DO NOT TAKE IMMEDIATE ACTION"; and
6. The time, date, and place of sale.
B. The mortgagee's or trustee's notice of default and intention to sell shall be mailed within thirty (30) days of the recording of the notice by certified mail, postage prepaid and by first class mail, postage prepaid, to the address last known to the mortgagee or the trustee or beneficiary of the following persons:
1. The mortgagor or grantor of the deed of trust;
2. Any successor in interest to the mortgagor or grantor whose interest appears of record or whose interest the mortgagee or the trustee or beneficiary has actual notice;
3. Any person having a lien or interest subsequent to the interest of the mortgagee or trustee when that lien or interest appears of record or when the mortgagee, the trustee, or the beneficiary has actual notice of the lien or interest; and
4. Any person requesting notice.
C. The disability, incapacity, or death of any person to whom notice must be given under this section shall not delay or impair in any way the mortgagee's or trustee's right to proceed with a sale, provided that the notice has been given in the manner required by this section to the guardian or conservator or to the administrator or executor, as the case may be.
Publication of notice.
The mortgagee or trustee shall publish the notice:
1. In a newspaper of general circulation in the county in which the trust property is situated or in a newspaper of general statewide daily publication one (1) time a week for four (4) consecutive weeks prior to the date of sale. The final publication shall be no more than ten (10) days prior to the sale;
By employing a third-party posting provider to post notice at the place at the county courthouse where foreclosure sales are customarily advertised and conducted; and By employing a third-party Internet foreclosure sale notice information service provider. On or before the date the mortgagee or trustee conducts the sale, a duly acknowledged affidavit of mailing and publication of the notice of default and intention to sell shall be filed for record with the recorder of the county in which the trust property is situated.
Manner of sale.
Arkansas foreclosure law states that the sale shall be held on the date and at the time and place designated in the notice of default and intention to sell, except that the sale shall:
1. Be held between 9:00 a.m. and 4:00 p.m.;
2. Be held either at the premises of the trust property or at the front door of the county courthouse of the county in which the trust property is situated; and
3. Not be held on a Saturday, Sunday, or a legal holiday.
Any person, including the mortgagee and the beneficiary, may bid at the sale. The trustee may bid for the beneficiary but not for himself or herself. The mortgagee or trustee shall engage a third party to conduct the sale and act at the sale as the auctioneer of the mortgagee or trustee. No bid shall be accepted that is less than two-thirds (2/3) of the entire indebtedness due at the date of sale.
The person conducting the sale may postpone the sale from time to time. In every such case, notice of postponement shall be given by:
1. Public proclamation thereof by that person; or
2. Written notice of postponement posted at the time and place last appointed for the sale.
No other notice of the postponement need be given unless the sale is postponed for longer than thirty (30) days beyond the date designated in the notice. Unless otherwise agreed to by the trustee or mortgagee, the purchaser shall pay at the time of sale the price bid. Interest shall accrue on any unpaid balance of the price bid at the rate specified in the note secured by the mortgage or deed of trust.
Within ten (10) days after the sale, the mortgagee or trustee shall execute and deliver the trustee's deed or mortgagee's deed to the purchaser. The mortgagee or beneficiary shall receive a credit on its bid for:
1. The amount representing the unpaid principal owed;
2. Accrued interest as of the date of the sale;
3. Advances for the payment of taxes, insurance, and maintenance of the trust property; and
4. Costs of the sale, including reasonable trustee's and attorney's fees.
The purchaser at the sale shall be entitled to immediate possession of the property. Possession may be obtained by filing a complaint in the circuit court of the county in which the property lies and attaching a copy of the recorded trustee's or mortgagee's deed, whereupon the purchaser shall be entitled to an ex parte writ of assistance. Alternatively, the purchaser may bring an action for forcible entry and detainer.
Effect of sale.
A sale made by a mortgagee or trustee shall foreclose and terminate all interest in the trust property of all persons to whom notice is given and of any other person claiming by, through, or under the person. A failure to give notice to any person entitled to notice shall not affect the validity of the sale as to persons notified. A person entitled to notice, but not given notice, shall have the rights of a person not made a defendant in a judicial foreclosure. A sale shall terminate all rights of redemption, and no person shall have a right to redeem the trust property after a sale, notwithstanding that the deed to and possession of the trust property have yet to be delivered. No notice shall be required to be given to any person claiming an interest subsequent to the filing of the notice of default and intention to sell. The filing of the notice of default and intention to sell shall have the same force and effect as the filing of a lis pendens in a judicial proceeding.
Disposition of proceeds of sale.
A. The trustee or mortgagee shall apply the proceeds of the sale as follows:
1. To the expenses of the sale, including compensation of the trustee or mortgagee and a reasonable fee by the attorney;
2. To the indebtedness owed;
3. To all persons having recorded liens subsequent to the interest of the trustee or mortgagee as their interests may appear in the order of the priority; and
4. The surplus, if any, to the grantor of the trust deed or to the successor in interest of the grantor entitled to the surplus.
Deficiency judgment.
At any time within twelve (12) months after a sale under this chapter, a money judgment may be sought for the balance due upon the obligation for which a mortgage or deed of trust was given as security. In such action, the plaintiff shall set forth in his or her complaint, and shall have the burden of proving, the entire amount of indebtedness which was secured by the mortgage or deed of trust, the amount for which the trust property was sold, and the fair market value of the trust property at the date of sale, together with interest from the date of sale, costs, and attorney's fees.
A. Judgment shall not exceed the lesser of the following:
1. The amount for which the indebtedness due at the date of sale, with interest from the date of sale, costs, and trustee's and attorney's fees, exceeds the fair market value of the trust property; or
2. The amount for which the indebtedness due at the date of sale, with interest from the date of sale, costs, and trustee's and attorney's fees, exceeds the amount for which the trust property was sold.
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