Foreclosure Frauds and Scams

Developer Faces Foreclosure Lawsuites

On May 20, 4 th Judicial District Judge Kim Smith approved a decree of foreclosure against SCB Investments LCC and Barber, allowing Bank of Fayetteville to sell the collateral. Barber is named in the foreclosure lawsuit because he personally guaranteed the debt.

The debt was originally $ 2. 66 million and, after some of the collateral was sold by Barber, the debt's current balance is $ 976, 382, according to the decree.

The remaining collateral consists of 18 lots, including nine residential and nine duplex lots.

The foreclosure sale is set for 10 a.m. June 12 outside the Washington County Circuit Clerk's office on the third floor of the courthouse in Fayetteville.

Efforts to contact Barber by telephone and e-mail on Friday were unsuccessful.

"I have to admit, I've been humbled by this market," Barber told the Arkansas Democrat-Gazette in January when the foreclosure suit was filed.

Barber also faces foreclosure lawsuits against other properties owned by related companies, but these remain in litigation and foreclosure decrees have not been issued. Barber and his companies - Barber Group Inc., Barber Development Inc. and Barber Construction Inc. - also face several other lawsuits.

A foreclosure lawsuit was filed in April against Old Missouri Office Building LLC, the entity that owns the offices at 2921 Old Missouri Road in Springdale where Barber's offices are located. The registered agent of this entity is the attorney representing Barber in his foreclosure cases. The ownership of limited liability companies is not available through public records.

Barber also faces foreclosure action filed in September against the Legacy Building near Dickson Street. The case remains tied up in court and will likely go to trial before a foreclosure decree is issued. Banks and several contractors are in a dispute over who holds the first-lien position. Typically, foreclosure decrees are issued without requiring a trial and do not take this long.

Bank of Fayetteville dodged a bullet on the Legacy Building. After financing the land purchase for Barber, Legacy Bank paid off Bank of Fayetteville and financed the construction of the luxury condominium project.

A court-appointed receiver has been appointed to manage the 37-condo development while the case remains tied up in court. The lender seeking foreclosure against the Old Missouri Office Building has requested a receiver be appointed for that property too.

First State Bank of Northwest Arkansas filed a foreclosure suit against Barber on May 9. The debt originated in May 2005 at $ 322, 790 and had a principal balance of $ 168, 731 with accrued interest of $ 38, 864, according to the complaint. The debt is secured by lots 173 and ® in the Clear Creek subdivision in Johnson.

Lenders may be hardpressed to collect any deficiency balances on these pending foreclosures against Barber. Deficiencies are typically collected by lenders who file judgments in counties where debtors own property with adequate equity or no liens.

The only property Barber owns in Washington County is a 5, 700-squarefoot home at 3122 E. Township in Fayetteville. County assessment records shows this property in the name of Brandon and Keri Barber had a value of $ 1. 25 million in 2007. First Federal Bank holds a $ 1 million mortgage against the Township property, according to county real estate records.