Circuit clerks: End sales role

Group seeks law cutting them off from foreclosure fees

The Arkansas Circuit Clerks Association wants lawmakers to approve legislation to bar elected officials, their immediate family members or their employees from being appointed by judges to conduct foreclosure sales and receive fees for conducting these sales, state lawmakers learned Thursday.

The fees have netted some circuit clerks thousands of dollars a year beyond their salaries for the county posts to which they have beenelected.

Chris Villines, executive director of the Arkansas Association of Counties, said there has been some controversy in the past few years about the circuit clerks collecting commissions on judicial foreclosure sales.

“It has become an issue that the circuit clerks would rather not deal with, so this bill would remove the ability for any county elected official to act as commissioner in a judicial foreclosure,” Villines told the House and Senate Committees on City,Council and Local Affairs as he briefed lawmakers on the association’s legislative package.

“It’s not worth the struggles that we had so far over the last couple of years on that issue,” he said.

Villines said the circuit clerks hope that there are other people in their counties who would be able to be appointed by judges as commissioners to conduct the foreclosure sales.

State Rep-elect John Hutchison, R-Harrisburg, questioned whether the circuit clerks are indeed willing to turn away from these fees.

Villines replied, “Yes, sir.”

Circuit clerks have been the most convenient and reputable people around the courthouse for the circuit judges to appoint for these sales, he said.

“But ... because it is an additional source of income for them and because of some of the issues raised in the last session over it, as a group they have decided to forgo that. It is just not worth thatfor them, and most of them don’t make much money at all off those sales,” Villines said.

After news reports in 2010 that Benton and Washington counties’ circuit clerks had received more than $100,000 each in fees, state lawmakers in 2011 attempted but failed to cap the fees or have them awarded to the general fund of the county rather than to the circuit clerk.

Hutchison asked why the circuit clerks couldn’t conduct these foreclosure sales for free.

Villines replied, “If it is [for] nothing, then you would be asking for a circuit clerk in their private capacity outside of work to do a job for free. There is nothing about judicial foreclosures that says the circuit clerk as an elected office is involved in the process of these commissioner sales.”

Just a few months ago, circuit clerks around the statesaid they didn’t plan to forgo the fees that they personally receive for conducting foreclosure sales, after Saline County Circuit Court Clerk Dennis Milligan said he would no longer accept the fees as personal money for conducting foreclosure sales.

Instead, Milligan has said he asked circuit judges to order that the fees go to the county general fund. Milligan, whose salary is $73,896, said he received about $19,400 in fees in 2011.

Circuit clerks in counties with larger populations and more wealth have said they make more in fees because of a higher number of foreclosures.

Arkansas law allows that when they are ordered to serve as commissioners of judicial foreclosures, circuit clerks can take a fee of onetenth of 1 percent of eachproperty-foreclosure sale worth more than $35,000. That equates to $100 when a house sells for $100,000 during a judicial foreclosure.

For property worth less than $35,000, the fee is set on a sliding scale. It starts at $10 for sales worth $500 or less and gradually increases to $35 for sales worth $20,000 to $35,000. Judges also can decide the fee amounts for sales on property worth less than $35,000.

Circuit clerks serve as commissioners only when ordered by a judge.

Hundreds of private foreclosure sales are handled by private companies every year, and fees assessed on private sales are often much higher than the percentage that clerks receive for judicial sales, according to Faulker County Circuit Clerk Rhonda Wharton

After the committees’ meeting, Villines said theArkansas Circuit Clerks Association decided this fall to ask lawmakers to approve legislation to bar elected officials, their immediate relatives or their employees from being appointed by judges to conduct foreclosure sales and receive fees for conducting these sales.

The circuit clerks want the law changed because of the “continued negative press” about them receiving the fees, Villines said.

“It is not worth it to them having to answer the questions at home day after day after day,” he said.

State Rep. and Sen.-elect Eddie Cheatham, D-Crossett, said he was surprised to learn recently that the circuit clerks have decided to seek this legislation and asked him to sponsor the measure.

“I think it will be better to take it out of their hands and they don’t have to do it,” he said. “It doesn’t look like they are doing something for personal gain.”

Northwest Arkansas, Pages 9 on 12/21/2012

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