The rules implemented by the CFPB aim to provide consumers with better tools and information when facing difficulty with mortgage loan obligations, and provide another layer of protection in the foreclosure process
The Act also requires a Notice of Default and Intention to Sale be filed (Ark. Code Ann. §18-50-104). The Notice of Default must be recorded in the property records, and must be mailed to the debtor and to junior lienholders of record. It must include a bold warning as follows: “YOU MAY LOSE YOUR PROPERTY IF YOU DO NOT TAKE IMMEDIATE ACTION.” It must provide the time, date and place of sale; the recording information of the deed of trust or mortgage to be foreclosed; the names of the parties to the mortgage or deed of trust; the legal description and street address of the property; the default for which the foreclosure is made; and the name, address and phone number of the party initiating the foreclosure. It must be mailed within thirty days of its recording, via certified mail and first class mail (Id). The notice must also be published in the newspaper for four consecutive weeks prior to sale, and be posted both online and at the county courthouse (Ark. Code Ann. §18-50-105). The Act also requires the trustee or attorney-in-fact conducting the sale on behalf of the mortgage servicer to record an affidavit confirming compliance with the Act’s mailing and publication requirements (Ark. Code Ann. §18-50-106). By requiring mailing of the Notice of Default by both first class and certified mail to the debtor and junior lienholders, Arkansas’s notice requirements are better than those in many other statutory foreclosure states.
The Act requires the mortgage servicer certify to its trustee or attorney-in-fact conducting the foreclosure that each debtor who applied for loan modification or forbearance assistance was notified that he or she did not meet the criteria for loan modification or forbearance assistance offered. The notification must be sent to the debtor by certified and first class mail at least ten business days before the foreclosure sale (Ark. Code Ann. §18-50-104).
Arkansas’s Statutory Foreclosure Act also requires the lender to send the debtor a packet of information at least 10 days prior to initiation of the foreclosure action (Ark
In addition to the notice requirements of the Arkansas Statutory Foreclosure Act, the CFPB imposes its own set of notice requirements upon mortgage servicers. The CFPB’s regulations require mortgage servicers to include information about delinquency in a borrower’s monthly statement if the borrower’s account becomes more than 45 days delinquent. This information must include the date the borrower became delinquent, the amount required to bring the loan current, and the risks of failing to bring the loan current, including the risk of foreclosure (12 CFR ). Servicers are also required to send written notice to borrowers no later than the 45th day of delinquency. This notice must include a statement encouraging the borrower to contact the mortgage servicer, and must include examples of loss mitigation options which may be available to avoid foreclosure as well as information about housing counseling (12 CFR ).
With so many notices sent to a debtor facing statutory foreclosure in Arkansas, it is hard to make an honest “lack of notice” argument against the process. Debtors are provided default information on numerous occasions, including information regarding their right to dispute the debt and how to pursue loss mitigation options. They also receive copies of their note, deed of trust or mortgage, and payment history showing the default. The Notice of Default is not only sent via regular mail, it is also sent via certified mail, posted online and at the county courthouse, and published in the newspaper. By the time of the foreclosure sale, an average debtor facing statutory foreclosure in Arkansas will receive no less than four separate notices, in addition to notices required by the CFPB and investor requirements. With so many notice requirements at both the state and federal level, a lack of notice argument against statutory foreclosures in Arkansas simply doesn’t stand up against the facts.
Code Ann. § 18-50-103). The packet must be mailed via standard mail to the debtor at either the other property address or the debtor’s mailing address, and must include the following information and documents: (1) the name of the holder and physical location of the original note; (2) information, including the phone number and internet address, regarding the availability to the debtor of each program for loan modification or forbearance assistance offered; (3) a copy of the note with all required endorsements; (4) a copy of the mortgage or deed of trust, and if in the possession of the mortgage company, each assignment of the mortgage or deed of trust; (5) and if the default is for nonpayment, a copy of the payment history showing the date of default. (Id) The Arkansas legislature amended the Act in 2011 to require this packet be sent prior to initiation of the foreclosure. It provides the debtor with the documents and information most often requested before the foreclosure is even initiated. This packet is not required to be sent to debtors when pursuing a judicial foreclosure.