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Bill

HB 1238

TO AUTHORIZE A MORTGAGOR TO RECOVER FEES IN CERTAIN CIRCUMSTANCES UNDER THE STATUTORY FORECLOSURE LAW.

2025 Regular Session Introduced by Fran Cavenaugh and 1 co-sponsor

Arkansas Act 306 permits homeowners to recover improperly charged fees during foreclosure proceedings under statutory law.

Notification that HB1238 is now Act 306
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Bill Summary · HB 1238

Legislative bill overview

HB 1238 (now Act 306) modifies Arkansas's statutory foreclosure law to allow mortgagors (homeowners) to recover certain fees under specific circumstances. The bill addresses situations where lenders or foreclosure actors may have charged improper or excessive fees during the foreclosure process, providing homeowners a legal pathway to recoup those costs.

Why is this important

Foreclosure proceedings involve multiple fees—attorney fees, court costs, title search fees, and other administrative charges—that can substantially increase the amount owed by struggling homeowners. By allowing recovery of improperly charged fees, this law provides consumer protection and may reduce predatory practices in the foreclosure process, while also clarifying what constitutes recoverable versus legitimate foreclosure expenses.

Potential points of contention

  • Defining "certain circumstances": The bill's language regarding which fees qualify for recovery and under what conditions may create litigation over whether specific fees were properly charged, placing burden on homeowners to prove impropriety
  • Lender concerns: Financial institutions may argue that fee recovery provisions increase their litigation risk and could make foreclosure processes costlier or slower, potentially affecting lending practices
  • Implementation ambiguity: Without clear regulatory guidance on fee schedules or caps, courts may interpret "improper" fees inconsistently across cases, creating unpredictability for both borrowers and lenders

Compiled from official sources — confirm details with the bill’s official record.

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