The procedures set forth in this chapter for the foreclosure of a mortgage or deed of trust shall not impair or otherwise affect the right to bring a judicial action to foreclose a mortgage or deed of trust.
A notice of default and intention to sell shall be filed within the time the foreclosure of the mortgage or deed of trust by judicial action could have been commenced.
The procedures set forth in this chapter shall apply only if the mortgagee or beneficiary is a mortgage company as defined in § 18-50-101 or is a bank or savings and loan. This chapter shall not apply to a mortgage or a deed of trust encumbering trust property used primarily for agricultural purposes.
Nothing in this chapter shall be construed to:
Create an implied right of redemption in favor of any person; or
Impair the right of any person or entity to assert his or her legal and equitable rights in a court of competent jurisdiction.
However, a claim or defense of a person or entity asserting his or her or its legal and equitable rights shall be asserted before the sale or it is forever barred and terminated, except that the mortgagor may assert the following against either the mortgagee or trustee:
Fraud; or
Failure to strictly comply with the provisions of this chapter, including without limitation subsection (c) of this section.
The claims or defenses described in subdivision (d)(2)(B) of this section may not be asserted against a subsequent purchaser for value of the property.
For purposes of this section, “purchaser for value” does not include the mortgagee or the trustee.
At any time prior to the delivery of the trustee's or mortgagee's deed, the trustee or mortgagee shall be authorized to set aside a sale conducted pursuant to this chapter by declaring the sale null and void and returning the purchase price to the highest bidder without any further liability to the bidder.
In this event, the trustee or mortgagee shall file an affidavit declaring the sale null and void with the recorder of the county in which the trust property is located, and all terms and provisions of the mortgage or deed of trust shall be revived and reinstated as if no sale had occurred.
Amendments.
The 1999 amendment added (d)(2)(B); added (e); and made stylistic changes.
The 2009 amendment, in (d)(2), inserted “of a person or entity asserting his or her or its legal and equitable rights” in (d)(2)(B), substituted “chapter” for “act” in (d)(2)(B)(ii), substituted “The claims or defenses described in subdivision (d)(2)(B) of this section” for “Any of the above claims or defenses” in (d)(2)(C)(i), and made minor stylistic changes.
RESEARCH REFERENCES
Ark. L. Rev.
Dale A. Whitman & Drew Milner, Symposium Article: Foreclosing on Nothing: The Curious Problem of the Deed of Trust Foreclosure Without Entitlement to Enforce the Note, 66 Ark. L. Rev. 21 (2013).
Lynn Foster, Symposium Article: Statutory Foreclosures in Arkansas: The Law and Recent Developments, 66 Ark. L. Rev. 111 (2013).
Nate Coulter, 2013-14 University of Arkansas School of Law Student-Run Clinics Yield Policy Insights and Practical Foreclosure Advice to Homeowners, 68 Ark. L. Rev. 551 (2015).
U. Ark. Little Rock L. Rev.
Annual Survey of Caselaw: Property Law, 27 U. Ark. Little Rock L. Rev. 739.
Case Notes
Construction.
Statutory framework makes clear that legal or equitable rights must be asserted before a foreclosure sale is held or the claim will be forever barred or terminated, except in cases where fraud or the failure to strictly comply with the applicable statutory provisions can be established.
Brown v. Fed. Home Loan Mortg. Corp., 2013 Ark. App. 574, 430 S.W.3d 125 (2013).
Claims Barred.
Summary judgment was properly granted in favor of defendant bank which failed to reinstate the mortgage of plaintiff couple; it was undisputed that the couple had failed to pay the entire amount of the past-due payments, late fees, and costs and expenses, including attorney's fees, before curing the default pursuant to § 18-50-114(a) and the couple failed to sue the bank until after the sale of the property. Lambert v. Firstar Bank, N.A., 83 Ark. App. 259, 127 S.W.3d 523 (2003).
Dismissal of owner's petition to set aside a statutory foreclosure sale of property by the bank was affirmed because an assertion that the land to be foreclosed on was primarily used for agricultural purposes was precisely the kind of claim or defense that must be raised prior to the sale or be forever barred and terminated and the owner did not raise the agricultural-lands defense until well after the auction sale. Cockrell v. Union Planters Bank, 359 Ark. 8, 194 S.W.3d 178 (2004).
Company's motion for summary judgment showed it was entitled to possession of the borrowers'
property, and it was then up to them to show either fraud or the failure to comply with the applicable requirements, but they failed to do so; because they did not present such proof, their other claims were forever barred.
Brown v. Fed. Home Loan Mortg. Corp., 2013 Ark. App. 574, 430 S.W.3d 125 (2013).
Limits.
After the sale, the borrowers were limited by statute to showing either fraud or the failure to comply with the applicable requirements as bases for setting aside the sale, and there was no statutory exception for setting aside a sale based on a legal or equitable claim that there had been a prior modification of the mortgage agreement.
Brown v. Fed. Home Loan Mortg. Corp., 2013 Ark. App. 574, 430 S.W.3d 125 (2013).
Requirements.
Only way the borrowers could have successfully set aside the foreclosure sale was to establish either fraud or the failure to strictly comply with the applicable statutory provisions.
Brown v. Fed. Home Loan Mortg. Corp., 2013 Ark. App. 574, 430 S.W.3d 125 (2013).
Validity of Sale.
Certain fees associated with the three foreclosures initiated by the creditor were not reasonable and therefore were disallowed. Because the creditor initiated the first foreclosure no later than February 27, 2009, and there was no evidence that it was the mortgagee before May 19, 2009, the first foreclosure would have been invalid under the Arkansas Statutory Foreclosure Act; the charges for the assignment of the mortgage were disallowed, as the assignment was not due to the debtors'
default; and the fees charged for posting and cancellation of sale appeared to be exorbitant.
In re Burrow, No. 3:09-bk-18876, 2011 Bankr. LEXIS 1092 (Bankr. E.D. Ark. Mar. 22, 2011).
Court denied bank's motion for summary judgment on its claim that a house owned by Chapter 13 debtors was not property of their bankruptcy estate because it was sold at a foreclosure sale that was conducted pursuant to § 18-50-107 three days before the debtors declared bankruptcy. While the bank might have been correct that the debtors lost their right of redemption under Arkansas law when the house was sold, it failed to consider the debtors'
right to cure a mortgage default under 11 U.S.C. § 1322, and the debtors'
house was property of their estate because the trustee had the right under this section to set aside the sale and the trustee's deed was not recorded until after the debtors declared bankruptcy.
In re McAdoo, No. 5:15-bk-72690, 2016 Bankr. LEXIS 4134 (Bankr. W.D. Ark. Nov. 21, 2016).
Cited:
Ellis v. State Farm Bank, F.S.B., 2009 Ark. App. 569 (2009); Sims v. Fay Servicing, 2020 Ark. App. 242 (2020).
Notes of Decisions
Cited in 15
cases (5 in the last 5 years), 1993–2025 · leading case: Cockrell v. Union Planters Bank, 194 S.W.3d 178 (Ark. 2004).
Cockrell v. Union Planters Bank, 194 S.W.3d 178 (Ark. 2004). · cites it 19דCockrell contends on appeal that the circuit court erred in interpreting and construing Ark. Code Ann. §§ 18-50-116 (c) and (d)(2) (Repl.”
Terri L. Alpe v. Fed. Nat'l Mortg. Ass'n, 2023 Ark. 58 (Ark. 2023). · cites it 10ד1 The questions of law presented concern the constitutionality of Act 1108 of 2021, which amended section 18-50-116 of the Arkansas Statutory Foreclosure Act.”
Lambert v. Firstar Bank, N.A., 127 S.W.3d 523 (Ark. Ct. App. 2003). · cites it 10דAppellee filed its motion for summary judgment, asserting that it was entitled to judgment as a matter of law because appellants had failed to comply with Ark. Code Ann. § 18-50-114 (a) (Supp. 2001) by tendering the entire amount of payments, late fees, and attorney’s fees and…”
In Re Johnson, 460 B.R. 234 (Bankr. E.D. Ark. 2011). · cites it 2ד” Ark.Code Ann. § 18-50-116(a). While this alternative method of collection (judicial foreclosure) may not be as efficient as the nonjudicial foreclosure process, the Court finds that it does not significantly impair the bank’s ability to collect on its debt.”
JPMorgan Chase Bank, N.A. v. Johnson, 470 B.R. 829 (E.D. Ark. 2012). · cites it 2דSee Ark.Code Ann. § 18-50-116 (use of the Statutory Foreclosure Act limited to mortgage companies, banks, or savings and loans associations).”
Brown v. Fed. Home Loan Mortg. Corp., 2013 Ark. App. 574 (Ark. Ct. App. 2013). · cites it 8ד) In addition, Arkansas Code Annotated section 18-50-116(d) (Supp.2011) provides in pertinent part: (d) Nothing in this chapter shall be construed to: [[Image here]] (2)(A) Impair the right of any person or entity to assert his or her legal and equitable rights in a court of…”
George Randall Wright v. Arkstone Real Est. Fund & Quanta Fin., LLC, 2025 Ark. App. 89 (Ark. Ct. App. 2025). · cites it 13דThe appellees specifically relied on Ark. Code Ann. § 18-50-116 (d)(2) (Repl. 2015), which provides: (d) Nothing in this chapter shall be construed to: .”
Bennie L. Sims & Brenda F. Sims v. Fay Servicing, LLC, 2020 Ark. App. 242 (Ark. Ct. App. 2020). · cites it 2דOn appeal, the Simses first argue that the circuit court erred in its application of Arkansas Code Annotated section 18-50-116 because the statute creates an exception for instances of fraud.”
Hunter v. Midfirst Bank (E.D. Ark. 2021). · cites it 6ד”35 Arkansas Code Annotated section 18-50-116 says that nothing in the Act “shall be construed to [i]mpair the right of any person or entity to assert his or her legal and equitable rights in a court of competent jurisdiction.”
Brown v. Fed. Home Loan Mortg. Corp., 2013 Ark. App. 574 (Ark. Ct. App. 2013). · cites it 9דSee Ark. Code Ann. § 18-50-116 (d)(2)(B). At the hearing, the trial court did an exemplary job of explaining to the Browns the rationale for, and the type of, proof it needed in order to deny Freddie Mac’s motion for summary judgment.”
Alpe v. Fed. Nat'l Mortg. Ass'n Inc (E.D. Ark. 2023). · cites it 4דThe certified questions are as follows: Is Act 1108 of 2021 unconstitutional (a) because it applies retroactively as stated in Section 3; (b) because the term “substantially comply” in Section 2(d)(2)(D) is void for vagueness; (c) because it deletes Section 2(d)(2)(C) (ii) which…”
In Re Johnson, 460 B.R. 234 (Bankr. E.D. Ark. 2011). “” Ark.Code Ann. § 18-50-116(a). While this alternative method of collection (judicial foreclosure) may not be as efficient as the nonjudicial foreclosure process, the Court finds that it does not significantly impair the bank’s ability to collect on its debt.”
— Ark. Code Ann. § 18-50-116(c) — 2 cases
Cockrell v. Union Planters Bank, 194 S.W.3d 178 (Ark. 2004). “Cockrell contends on appeal that the circuit court erred in interpreting and construing Ark. Code Ann. §§ 18-50-116 (c) and (d)(2) (Repl.”
Lambert v. Firstar Bank, N.A., 127 S.W.3d 523 (Ark. Ct. App. 2003). “Appellee filed its motion for summary judgment, asserting that it was entitled to judgment as a matter of law because appellants had failed to comply with Ark. Code Ann. § 18-50-114 (a) (Supp. 2001) by tendering the entire amount of payments, late fees, and attorney’s fees and…”
Cockrell v. Union Planters Bank, 194 S.W.3d 178 (Ark. 2004). “Cockrell contends on appeal that the circuit court erred in interpreting and construing Ark. Code Ann. §§ 18-50-116 (c) and (d)(2) (Repl.”
Brown v. Fed. Home Loan Mortg. Corp., 2013 Ark. App. 574 (Ark. Ct. App. 2013). “) In addition, Arkansas Code Annotated section 18-50-116(d) (Supp.2011) provides in pertinent part: (d) Nothing in this chapter shall be construed to: [[Image here]] (2)(A) Impair the right of any person or entity to assert his or her legal and equitable rights in a court of…”
In re Henson, 157 B.R. 867 (Bankr. W.D. Ark. 1993).
— Ark. Code Ann. § 18-50-116(d)(2) — 2 cases
Cockrell v. Union Planters Bank, 194 S.W.3d 178 (Ark. 2004). “Cockrell contends on appeal that the circuit court erred in interpreting and construing Ark. Code Ann. §§ 18-50-116 (c) and (d)(2) (Repl.”
Hunter v. Midfirst Bank (E.D. Ark. 2021). “”35 Arkansas Code Annotated section 18-50-116 says that nothing in the Act “shall be construed to [i]mpair the right of any person or entity to assert his or her legal and equitable rights in a court of competent jurisdiction.”
— Ark. Code Ann. § 18-50-116(d)(2)(B) — 5 cases
Cockrell v. Union Planters Bank, 194 S.W.3d 178 (Ark. 2004). “Cockrell contends on appeal that the circuit court erred in interpreting and construing Ark. Code Ann. §§ 18-50-116 (c) and (d)(2) (Repl.”
Lambert v. Firstar Bank, N.A., 127 S.W.3d 523 (Ark. Ct. App. 2003). “Appellee filed its motion for summary judgment, asserting that it was entitled to judgment as a matter of law because appellants had failed to comply with Ark. Code Ann. § 18-50-114 (a) (Supp. 2001) by tendering the entire amount of payments, late fees, and attorney’s fees and…”
Brown v. Fed. Home Loan Mortg. Corp., 2013 Ark. App. 574 (Ark. Ct. App. 2013). “) In addition, Arkansas Code Annotated section 18-50-116(d) (Supp.2011) provides in pertinent part: (d) Nothing in this chapter shall be construed to: [[Image here]] (2)(A) Impair the right of any person or entity to assert his or her legal and equitable rights in a court of…”
Brown v. Fed. Home Loan Mortg. Corp., 2013 Ark. App. 574 (Ark. Ct. App. 2013). “See Ark. Code Ann. § 18-50-116 (d)(2)(B). At the hearing, the trial court did an exemplary job of explaining to the Browns the rationale for, and the type of, proof it needed in order to deny Freddie Mac’s motion for summary judgment.”
Hunter v. Midfirst Bank (E.D. Ark. 2021). “”35 Arkansas Code Annotated section 18-50-116 says that nothing in the Act “shall be construed to [i]mpair the right of any person or entity to assert his or her legal and equitable rights in a court of competent jurisdiction.”
— Ark. Code Ann. § 18-50-116(d)(2)(C) — 1 case
Hunter v. Midfirst Bank (E.D. Ark. 2021). “”35 Arkansas Code Annotated section 18-50-116 says that nothing in the Act “shall be construed to [i]mpair the right of any person or entity to assert his or her legal and equitable rights in a court of competent jurisdiction.”
— Ark. Code Ann. § 18-50-116(d)(2)(D) — 2 cases
Terri L. Alpe v. Fed. Nat'l Mortg. Ass'n, 2023 Ark. 58 (Ark. 2023). “1 The questions of law presented concern the constitutionality of Act 1108 of 2021, which amended section 18-50-116 of the Arkansas Statutory Foreclosure Act.”
Alpe v. Fed. Nat'l Mortg. Ass'n Inc (E.D. Ark. 2023). “The certified questions are as follows: Is Act 1108 of 2021 unconstitutional (a) because it applies retroactively as stated in Section 3; (b) because the term “substantially comply” in Section 2(d)(2)(D) is void for vagueness; (c) because it deletes Section 2(d)(2)(C) (ii) which…”
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