State foreclosure law keeps homeowners informed

The ongoing recession has made it difficult for some Arkansas consumers to pay their bills in a timely fashion. Costs are rising everywhere, from the grocery store to the gas station. The weak economy has been particularly tough on some homeowners whose tight finances have put them at risk of losing their homes because they have fallen behind in their mortgage payments.

Attorney General Dustin McDaniel issued a consumer alert today reminding homeowners of Act 885 of 2011. The law, sponsored by Rep. Tiffany Rogers of Stuttgart and enacted by the General Assembly last year, requires additional information be provided to homeowners and encourages loss mitigation or loan modification before a foreclosure is initiated.

“We want to make sure family homes in Arkansas are saved whenever possible,” McDaniel said. “Before Act 885, homeowners often got too little information before their homes were placed in foreclosure. Now, the law requires mortgage servicers to provide additional documentation to the homeowners that they can use to learn more about who actually holds their mortgage and whether they have a legitimate defense to prevent the foreclosure.”

Act 885 provides two significant benefits to Arkansas homeowners facing possible foreclosure.

First, mortgage servicersare required to provide homeowners with copies of all relevant documents prior to initiating the foreclosure so that the homeowner has the opportunity to review the process and, if necessary, contact an attorney for assistance.

Specific documents that must be provided to the homeowner prior to initiating a foreclosure include:

• Copies of the note, mortgage and any assignments

• The physical location of these documents

• An accounting of the homeowner’s payment history

Second, mortgage servicers must provide homeowners with information about loss mitigation or loan modification programs that might be available to them prior to foreclosure. This includes the contact information for programs offered by the mortgage servicer as well as contact information for any government-sponsored mitigation programs for which the homeowner may be eligible.