Arkansas Code
Chapter 53 - Arkansas Home Loan Protection Act
§ 23-53-105. Preservation and enforcement of claims and defenses — No subterfuge

(a) Liability of Assignees and Other Holders in High-Cost Home Loans.
(1) Notwithstanding any provision of any other law, the remedies provided in this chapter apply to any person or entity who personally participated in the making or approving of the high-cost home loan and who violated the requirements of this chapter.
(2)
(A)
(i) Any person who purchases or is otherwise assigned a high-cost home loan shall be subject to all affirmative claims and any defenses with respect to the loan that the borrower could assert against the original creditor or broker of the loan.
(ii) However, if the purchaser or assignee demonstrates by a preponderance of the evidence that at the time of the purchase of the home loans or within a reasonable time thereafter the purchaser or assignee exercised reasonable due diligence that was intended to prevent the purchaser or assignee from purchasing or taking assignment of high-cost home loans, then the purchaser or assignee shall have no liability to any person under this chapter.

(B) The liability of any person who purchases or is otherwise assigned a high-cost home loan whose liability is established under this subsection but who did not personally participate in the making or approving of the high-cost home loan, shall be limited to the amount of all remaining indebtedness of the borrower and the total amount paid by the borrower in connection with the transaction.
(C) Any person incurring liability as an assignee is entitled to full recourse against any previous assignee or against any person or entity who personally participated in making or approving the home loan for the full amount of liability sustained by the assignee.


(b) Liability of Assignees in Foreclosure Action. Notwithstanding any provision of any other law, a borrower in default more than sixty (60) days or in foreclosure may assert a violation of this chapter by way of offset:
(1)
(A) As an original action, in an individual action only, brought within two (2) years from the date of the occurrence of the violation.
(B) A borrower shall not be barred from asserting a violation in an action to collect the debt which was brought more than one (1) year from the date of the occurrence of the violation as a matter of defense by recoupment or set-off in the action except as otherwise provided by law;

(2) As a defense or counterclaim to an action to collect amounts owed; or
(3) To obtain possession of the home secured by the high-cost home loan.

(c) No Subterfuge. It is a violation of this chapter for any person who in bad faith attempts to avoid the application of this chapter by:
(1) Dividing any loan transaction into separate parts for this purpose; or
(2) Any other subterfuge, with the intent of evading the provisions of this chapter.

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