AR HB1238

Mortgagors may recover reasonable attorney's fees when a court sets aside a statutory foreclosure sale due to the mortgagee's failure to strictly comply with foreclosure law requirements under § 18-50-101 et seq.

Attorney's fees are not available if the mortgagor and mortgagee reach a mutual resolution of the debt and foreclosure, or if the mortgagor files for bankruptcy while foreclosure or related litigation is pending.

Attorney's fees are denied when the mortgagee acted in good faith relying on a title insurance policy later found to be in error, or without knowledge of unrecorded debt on the property.

Attorney's fees are also excluded when the mortgagee had no knowledge of assessments, taxes, or liens filed after the final title insurance policy was issued, or when the mortgage is reinstated under § 18-50-114.

Approved March 18, 2025 as Act 306 of the Regular Session.