BENTON COUNTY — A state lawmaker said Thursday that he would not have accepted the “excessive” personal fee paid to Benton County Circuit Clerk Brenda DeShields for selling a foreclosed-on property if he had been in her place.
“I couldn’t take it, but that’s just me,” said state Rep. Eddie Cheatham, D-Crossett, who plans to propose legislation next month to limit how much circuit clerks can profit from a foreclosure sale. “But everybody is different. I’m sure she’s not going to give it back.”
Benton County Circuit Judge Douglas Schrantz on Wednesday approved DeShields’ $24,100 fee when he signed an order confirming the Sept. 28 foreclosure sale of Pinnacle Point in Rogers for $24.1 million.
Arkansas Code Annotated 21-6-412 allows sales commissioners, who are most often circuit clerks, to collect a fee of one-tenth of 1 percent of a foreclosure property’s sale price. Circuit judges appoint the clerk to serve as sales commissioner.
Cheatham said Thursday that he will file legislation to cap the fee collected by circuit clerks working as sales commissioners at $100 per foreclosure. Any additional fees raised as part of collecting the “one-tenth of 1 percent” would go to a county’s general fund, Cheatham said.
“I already have enough [support] behind me in the House to pretty much take it all away [from the circuit clerks] if I want to,” Cheatham said.
“In my heart, I think there ought to be no fee because they are doing it on their regular time.”
DeShields said Thursday that she felt uncomfortable requesting the $24,100 fee after the Arkansas Democrat-Gazette published an Oct. 1 story about how much she would receive for overseeing the Pinnacle Point auction.
DeShields said she did not request a specific fee in the commissioner’s report of sale filed Tuesday with the Benton County Circuit Court after learning of objections by Cheatham and other legislators.
Normally, she would list the specific amount she is owed, she said.
“It doesn’t matter to me,”DeShields said. “That’s why I left it blank.”
Wednesday’s order signed by Schrantz listed the fee as $24,100.
In most instances, the “one-tenth of 1 percent” fee allowed by state law isn’t nearly so much. For example, a circuit clerk makes $100 after selling a house for $100,000 during a judicial foreclosure. But because there is no limit on how much a circuit clerk can make on a single transaction, a multimillion-dollar sale can put thousands of dollars in a circuit clerk’s pocket.
DeShields has made about $100,000 this year in commissioner’s fees. Her county salary is $76,586.
An income tax record revealed Washington County Circuit Clerk Bette Stamps earned $104,458 in fees last year on the sale of 222 properties. Stamps declined to comment for this article. Her county salary is $80,459.
“Our forefathers didn’t have any idea that we would have those kinds of sales up there dueto our economic situation,” said Donna Wilson, president of the Arkansas Circuit Clerks Association.
Circuit clerks make far less in commissioner’s fees in other parts of the state because they deal with fewer foreclosures and properties that generally sell for much less at auction.
Benton and Washington counties have had the state’s highest numbers of foreclosures during the past two years. Wilson, the Stone County circuit clerk, said she made about $2,000 in fees last year and less than $500 so far this year.
The circuit clerks association hasn’t taken a position on whether the fees are appropriate or whether the money should go to a county’s general fund, Wilson said.
“My first thought is this is judicial sales through a circuit court,” Wilson said. “I don’t know about getting county government all entwined with the judicial setting. That’s my first reaction.
“I’d love to talk to Mr. Cheatham and see where he’s coming from with this. We should talk.”
State Rep. Uvalde Lindsey, D-Fayetteville, said he thinks the clerks should conduct foreclosure auctions without being paid any fee.
“It shouldn’t be a personal enrichment thing,” Lindsey said.
Matt DeCample, a spokesman for Gov. Mike Beebe, said the governor isn’t involved in the discussion.
“If it does pick up some momentum in the Legislature, that’s the point where we get involved,” DeCample said.
Front Section, Pages 1 on 10/15/2010