I own a condominium in Arkansas. Unfortunately, I am behind in my mortgage payments and my home is now in foreclosure. I've heard that you can "redeem" a home after foreclosure. Is this true? If I lose my condo in foreclosure, can I get it back?
You may have the opportunity to get your home back after the foreclosure sale, but it’s very unlikely. In Arkansas, you can repurchase or “redeem” your home after losing it in foreclosure only under certain circumstances. If yours is similar to most Arkansas foreclosures, you probably won’t meet the criteria for redemption.
Your Right to Redeem in a Nutshell
Whether you can redeem your home depends on whether the foreclosure was nonjudicial (where the foreclosure takes place without court supervision) or judicial (where the lender files a lawsuit in court to foreclose your home). In a nutshell, here are the rules:
- Judicial foreclosure. If the foreclosure was judicial you can redeem your home within one year of the foreclosure sale, but not if the mortgage or deed of trust contains a waiver of the right to redeem. (We explain this in more detail below.)
- Nonjudicial foreclosure. If the foreclosure was nonjudicial, you cannot redeem your home after foreclosure. (Ark. Code Ann. § 18-50-108(b).)
In Arkansas, most foreclosures are nonjudicial and most loan documents waive the right to redeem.
When You Can Get Your Home Back in Arkansas
Under Arkansas law, if the foreclosure is judicial, you have one year after the sale to redeem your home (Ark. Code Ann. § 18-49-106(a)(2)). However, if the mortgage or deed of trust that you signed when taking out the loan specifically waives the right of redemption, you can't redeem the home after the foreclosure (Ark. Code Ann. § 18-49-106(b)).
Do Your Loan Documents Waive Your Right to Redeem?
Arkansas mortgages and deeds of trust typically contain a waiver of redemption rights. Be sure to check your loan documents before the sale to find out if you have waived the right to redeem the home after the foreclosure. Otherwise you could find yourself out of luck if you wait until the foreclosure is completed to try to save your home.
What If You Don't Redeem Within One Year?
If your loan documents do not contain a waiver and you don’t redeem the home within the one-year time frame (called the redemption period), your right to redeem expires. After that, you won’t have another opportunity to get your house back. (Learn more general information about the right of redemption.)
How Much You'll Have to Pay to Get Your Home Back
In order to redeem, you must reimburse the purchaser (the person or entity who bought it at the foreclosure sale) for the full price paid at the sale plus interest (Ark. Code Ann. § 18-49-106(a)(2)).
To find out the procedure for redeeming your home after a judicial foreclosure, check with the court or consult with an Arkansas attorney.
If Possible, Don’t Wait Until After the Foreclosure to Save Your Home
In most cases if you want to keep your home, it is better to take action before the foreclosure sale. This will give you more options to save the property. For example, you could:
- pay off the past-due amounts to reinstate (catch up on) the loan, or
- try to work out an alternative to foreclosure that will allow you to keep the property, such as a mortgage modification, forbearance agreement, or repayment plan.
Once started, most foreclosures in Arkansas take just a few months to complete so you’ll need to act quickly if you want to explore alternatives to foreclosure before the sale. (To learn more about foreclosure laws and procedures in Arkansas, visit Nolo’s Arkansas Foreclosure Law Center.)
Finding Arkansas’ Redemption Laws
To find the statutes that discuss your right to redeem the home after a judicial foreclosure in Arkansas, go to Title 18, Chapter 49 of the Arkansas Statutes.