Bill Summary – FastDemocracy

Stricken language would be deleted from and underlined language would be added to present law.
                                          Act 1108 of the Regular Session
 1   State of Arkansas                   As Engrossed:       S4/15/21
 2   93rd General Assembly                        A Bill
 3   Regular Session, 2021                                                             SENATE BILL 673
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 5   By: Senator A. Clark
 6   By: Representatives Dalby, Hudson
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 8                                     For An Act To Be Entitled
 9                  AN ACT TO AMEND THE STATUTORY FORECLOSURE ACT OF
10                  1987; AND FOR OTHER PURPOSES.
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13                                                 Subtitle
14                           TO AMEND THE STATUTORY FORECLOSURE ACT OF
15                           1987.
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18   BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
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20          SECTION 1.        DO NOT CODIFY.      Legislative findings and intent.
21          The General Assembly finds that:
22                  (1)      There is a compelling public interest to establish a date of
23   finality in real property sales to avoid creating a cloud on titles to real
24   property in the State of Arkansas;
25                  (2)      The decision of the Supreme Court in Davis v. Pennymac,
26   2020 Ark. 180, has resulted in instability and uncertainty in the real estate
27   market as it relates to the sale of properties subject to or following a
28   statutory foreclosure; and
29                  (3)      It is the intent of the General Assembly that this act be
30   applied to all foreclosure sales held since the enactment of Act 885 of 2011
31   as that act created substantial consumer protection obligations on the
32   parties availing themselves of the Statutory Foreclosure Act of 1987.
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34          SECTION 2.        Arkansas Code  18-50-116 is amended to read as follows:
35          18-50-116.       Miscellaneous provisions.
36          (a)    The procedures set forth in this chapter for the foreclosure of a
     *DTP049*                                                                    04-15-2021 09:04:09 DTP049
     As Engrossed:         S4/15/21                                                       SB673
 1   mortgage or deed of trust shall not impair or otherwise affect the right to
 2   bring a judicial action to foreclose a mortgage or deed of trust.
 3          (b)   A notice of default and intention to sell shall be filed within
 4   the time the foreclosure of the mortgage or deed of trust by judicial action
 5   could have been commenced.
 6          (c)(1)     The procedures set forth in this chapter shall apply only if
 7   the mortgagee or beneficiary is a mortgage company as defined in  18-50-101
 8   or is a bank or savings and loan.
 9                   (2)    This chapter shall not apply to a mortgage or a deed of
10   trust encumbering trust property used primarily for agricultural purposes.
11          (d)   Nothing in this chapter shall be construed to:
12                   (1)    Create an implied right of redemption in favor of any
13   person; or
14                   (2)(A)     Impair the right of any person or entity to assert his or
15   her legal and equitable rights in a court of competent jurisdiction.
16                            (B)   However, a claim or defense of a person or entity
17   asserting his or her or its legal and equitable rights shall be asserted
18   before prior to the sale or it is the claim or defense is be forever barred
19   and terminated, except the mortgagor may assert the following against either
20   the mortgagee or trustee:
21                                    (i)   Fraud by any party; or
22                                    (ii) Failure to strictly comply with the provisions
23   of this chapter, including without limitation subsection (c) of this section
24   act.
25                            (C)(i) The Any of the above claims or defenses described in
26   subdivision (d)(2)(B) of this section may not be asserted against a
27   subsequent purchaser for value of the property.
28                                    (ii) For purposes of this section, purchaser for
29   value does not include the mortgagee or the trustee.
30                            (D)   Any claims or defenses for a violation of subdivision
31   (d)(2)(B)(ii) of this section shall be asserted within thirty (30) days of
32   the foreclosure sale to ensure the finality of sales that substantially
33   comply with this chapter.
34          (e)(1) At any time prior to the delivery of the trustee's or
35      mortgagee's deed, the trustee or mortgagee shall be authorized to may set
36      aside a sale conducted pursuant to this chapter by declaring the sale null
                                                  2                  04-15-2021 09:04:09 DTP049
     As Engrossed:   S4/15/21                                                   SB673
 1     and void and returning the purchase price to the highest bidder without
 2     any further liability to the bidder.
 3               (2) In this event, the trustee or mortgagee shall file an
 4   affidavit declaring the sale null and void with the recorder of the county in
 5   which the trust property is located, and all terms and provisions of the
 6   mortgage or deed of trust shall be revived and reinstated as if no sale had
 7   occurred.
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 9        SECTION 3.   DO NOT CODIFY. Retroactivity.
10        This act applies retroactively to March 31, 2011.
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13                                    /s/A. Clark
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16                                 APPROVED: 5/3/21
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