“Two weeks ago an Opinion and Order was rendered in the Eastern District of Arkansas Bankruptcy Court. Said Order was issued to resolve three Objection to Confirmation hearings wherein the facts and arguments were all the same. Briefly stated the Judge determined that entities that wish to avail themselves of the Arkansas Statutory Foreclosure Act (ASFA) i.e. foreclose property non-judicially, must be registered with the Arkansas Secretary of State for the foreclosure to be valid. The Order disallowed the inclusion of foreclosure fees in the debtor’s plan. The fallout from this Order is that national title insurance underwriters are declining to insure the validity of title following a non-judicial foreclosure when the entity seeking relief is not registered with the Arkansas Secretary of State or the Arkansas State Banking Department.”
“We are working diligently with title underwriters, the Secretary of State, state legal authorities, and the law firm mounting an appeal of what we believe is a clearly erroneous order. Notices will be generated on all new Arkansas referrals when the entity seeking or having obtained foreclosure falls into this category. We will be updating you as the matter goes forward; however we will need your direction as to how you wish to proceed with each file.”
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Legal ruling slows Arkansas foreclosure sales
Meanwhile, Little Rock Realtor Allen Trammel said that — in the past week — two of his clients who purchased homes that had been taken back through the state’s non-judicial foreclosure laws were in limbo. He said the explanation given to him in each instance is that title companies are typically refusing to issue title insurance in those transfers until they can determine whether the homes were taken in compliance with state law.
Bob Balhorn, another Little Rock Realtor, confirmed that the In Re Johnson case has put the brakes on sales of the foreclosed properties at issue.
The issuance of title insurance is, quite often, a prerequisite when property is transferred from one owner to another. When that insurance is not issued, questions arise as to validity of the transaction — can the seller make a valid transfer to the property that will not be challenged by another party in the future?
A First Arkansas News reader who requested anonymity stated his family has purchased a home in the state that was taken through a non-judicial foreclosure proceeding. The reader reported that the sale has been put on hold due to concern over the validity of the foreclosure and there is no clear indication as to when the transaction will close.
Megan Skarda, an escrow officer with Associates Closing & Title in Little Rock, addressed the issue in a letter sent out on Oct. 21 to companies and individuals involved in the sales of homes taken through non-judicial foreclosure.
“As I am sure you all have encountered recently, a decision with the bankruptcy court has caused us to do a lot of new research on non-judicial foreclosed properties that are currently under (sales) contract(s),” Skarda stated in the letter, adding her company is trying to decide if those properties have been taken in compliance with state law.
In cases where lenders were not authorized to do business in Arkansas, Skarda said it may be necessary for those organizations to take the properties through traditional, judicial foreclosures.
Poor wittle banksters…
Copy of the In RE Johnson opinion below…
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4closureFraud.org
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Just face it,Banks are nothing more then New Age Banksters that have Politcal Ties to allow them to Practice Fraudulent Activitys for ones Personal Finacial Gains.The Corruption in certain Deptments accepting a Pay off to Foreclose & Evict People from their Homes is nothing more then Criminal Activitys.
“THE PLOT THICKENS.”
I wish we could afford to purchase massive signs that say this and post them on foreclosed houses for sale. It might get some attention from the people with their heads in the sand.