Foreclosure and repossession allow lenders to recoup some of the losses they've taken on a mortgage that is in default. While each option seeks to return ownership of the home to the lender so it can be resold, they achieve this goal in varying ways. Learn more about the differences between foreclosure and repossession here.

What Is Foreclosure?

In foreclosure, the lender must follow a defined legal process to resell the property. In Arkansas, there are two types of foreclosure — judicial and nonjudicial.

With a judicial foreclosure, the lender files a lawsuit, and the court determines an amount the borrower must pay. If the borrower cannot repay as stipulated by the judge, then the clerk of court lists the property for sale.

In a nonjudicial foreclosure, the lender or their trustee can take the home and sell it directly, adhering to a specific timeline at every step. Nonjudicial foreclosures tend to be more common as they are the preferred method of lenders and are clearly stated in the deed of title at the time of signing.

What Is Repossession?

On a very basic level, repossession is the natural result of foreclosure. A repossessed home is one that has completed the foreclosure process, whether judicial or nonjudicial, and the right to sell the property has reverted to the lender.

Repossession does not occur until the foreclosure is finalized, so the current owners of the home can remain there until the final decree is issued by the courts. After that, they need to vacate since they are no longer considered the legal owners of the property.

If you're concerned about foreclosure and repossession, have the support of a skilled attorney on your side. Bueker Law Firm has been serving Central and Southeast Arkansas since 2001. Bankruptcy and foreclosure attorney Jeremy Bueker offers comprehensive representation for every stage of foreclosure and repossession as well as for Chapter 7 and Chapter 13 bankruptcy claims. Call (870) 673-1313 or visit his office's website to schedule a consultation.