Saturday, April 26, 2008

Foreclosuer Consultant FLorida Bill

A bill to be entitled
2
An act relating to foreclosure fraud; creating s.
3
501.1377, F.S.; providing legislative findings and intent
4
with respect to the need to protect homeowners who enter
5
into agreements designed to save their homes from
6
foreclosure; providing definitions; prohibiting a
7
foreclosure-rescue consultant from engaging in certain
8
acts or failing to perform contracted services; requiring
9
that all agreements for foreclosure-related rescue
10
services and foreclosure-rescue transactions be in
11
writing; specifying information that must be in the
12
written agreement; requiring that certain statements in
13
the written agreement be in uppercase letters and of a
14
specified size; providing that the homeowner has a right
15
to cancel the agreement for a specified period and the
16
right may not be waived; providing that the homeowner has
17
a specified period during which to cure a default under
18
certain circumstances; requiring equity purchasers to
19
assume or discharge certain liens; requiring that an
20
equity purchaser verify the homeowner's ability to make
21
payments under a repurchase agreement; providing price
22
limitations for repurchase transactions; providing for a
23
rebuttable presumption of certain transactions being
24
unconscionable under certain circumstances; providing for
25
limited application of the presumption; providing an
26
exclusion; providing that a foreclosure-rescue transaction
27
involving a lease option or other repurchase agreement
28
creates a rebuttable presumption that the transaction is a
29
loan transaction and the conveyance from the homeowner to
30
the equity purchaser is a mortgage; providing limited
31
application of the presumption; providing an exclusion;
32
providing that a person who violates certain provisions
33
commits an unfair and deceptive trade practice as defined
34
in part II of ch. 501, F.S.; providing penalties;
35
repealing s. 501.2078, F.S., relating to violations
36
involving individual homeowners during the course of
37
residential foreclosure proceedings; providing an
38
effective date.
39
40
Be It Enacted by the Legislature of the State of Florida:
41
42
Section 1. Section 501.1377, Florida Statutes, is created
43
to read:
44
501.1377 Violations involving homeowners during the course
45
of residential foreclosure proceedings.--
46
(1) LEGISLATIVE FINDINGS AND INTENT.--The Legislature finds
47
that homeowners who are in default on their mortgages, in
48
foreclosure, or at risk of losing their homes due to nonpayment
49
of taxes may be vulnerable to fraud, deception, and unfair
50
dealings with foreclosure-rescue consultants or equity
51
purchasers. The intent of this section is to provide a homeowner
52
with information necessary to make an informed decision regarding
53
the sale or transfer of his or her home to an equity purchaser.
54
It is the further intent of this section to require that
55
foreclosure-related rescue services agreements be expressed in
56
writing in order to safeguard homeowners against deceit and
57
financial hardship; to ensure, foster, and encourage fair dealing
58
in the sale and purchase of homes in foreclosure or default; to
59
prohibit representations that tend to mislead; to prohibit or
60
restrict unfair contract terms; to provide a cooling-off period
61
for homeowners who enter into contracts for services related to
62
saving their homes from foreclosure or preserving their rights to
63
possession of their homes; to afford homeowners a reasonable and
64
meaningful opportunity to rescind sales to equity purchasers; and
65
to preserve and protect home equity for the homeowners of this
66
state.
67
(2) DEFINITIONS.--As used in this section, the term:
68
(a) "Equity purchaser" means any person who acquires a
69
legal, equitable, or beneficial ownership interest in any
70
residential real property as a result of a foreclosure-rescue
71
transaction. The term does not apply to a person who acquires the
72
legal, equitable, or beneficial interest in such property:
73
1. By a certificate of title from a foreclosure sale
74
conducted under chapter 45;
75
2. At a sale of property authorized by statute;
76
3. By order or judgment of any court;
77
4. From a spouse, parent, grandparent, child, grandchild,
78
or sibling of the person or the person's spouse; or
79
5. As a deed in lieu of foreclosure, a workout agreement, a
80
bankruptcy plan, or any other agreement between a foreclosing
81
lender and a homeowner.
82
(b) "Foreclosure-rescue consultant" means a person who
83
directly or indirectly makes a solicitation, representation, or
84
offer to a homeowner to provide or perform, in return for payment
85
of money or other valuable consideration, foreclosure-related
86
rescue services. The term does not apply to:
87
1. A person excluded under s. 501.212.
88
2. A person acting under the express authority or written
89
approval of the United States Department of Housing and Urban
90
Development or other department or agency of the United States or
91
this state to provide foreclosure-related rescue services.
92
3. A charitable, not-for-profit agency or organization, as
93
determined by the United States Internal Revenue Service under s.
94
501(c)(3) of the Internal Revenue Code, which offers counseling
95
or advice to an owner of residential real property in foreclosure
96
or loan default if the agency or organization does not contract
97
for foreclosure-related rescue services with a for-profit lender
98
or person facilitating or engaging in foreclosure-rescue
99
transactions.
100
4. A person who holds or is owed an obligation secured by a
101
lien on any residential real property in foreclosure if the
102
person performs foreclosure-related rescue services in connection
103
with this obligation or lien and the obligation or lien was not
104
the result of or part of a proposed foreclosure reconveyance or
105
foreclosure-rescue transaction.
106
5. A financial institution as defined in s. 655.005 and any
107
parent or subsidiary of the financial institution or of the
108
parent or subsidiary.
109
6. A licensed mortgage broker, mortgage lender, or
110
correspondent mortgage lender that provides mortgage counseling
111
or advice regarding residential real property in foreclosure,
112
which counseling or advice is within the scope of services set
113
forth in chapter 494 and is provided without payment of money or
114
other consideration other than a mortgage brokerage fee as
115
defined in s. 494.001.
116
(c) "Foreclosure-related rescue services" means any good or
117
service related to, or promising assistance in connection with:
118
1. Stopping, avoiding, or delaying foreclosure proceedings
119
concerning residential real property; or
120
2. Curing or otherwise addressing a default or failure to
121
timely pay with respect to a residential mortgage loan
122
obligation.
123
(d) "Foreclosure-rescue transaction" means a transaction:
124
1. By which residential real property in foreclosure is
125
conveyed to an equity purchaser and the homeowner maintains a
126
legal or equitable interest in the residential real property
127
conveyed, including, without limitation, a lease option interest,
128
an option to acquire the property, an interest as beneficiary or
129
trustee to a land trust, or other interest in the property
130
conveyed; and
131
2. That is designed or intended by the parties to stop,
132
avoid, or delay foreclosure proceedings against a homeowner's
133
residential real property.
134
(e) "Homeowner" means any record title owner of residential
135
real property that is the subject of foreclosure proceedings.
136
(f) "Residential real property" means real property
137
consisting of one-family to four-family dwelling units, one of
138
which is occupied by the owner as his or her principal place of
139
residence.
140
(g) "Residential real property in foreclosure" means
141
residential real property against which there is an outstanding
142
notice of the pendency of foreclosure proceedings recorded
143
pursuant to s. 48.23.
144
(3) PROHIBITED ACTS.--In the course of offering or
145
providing foreclosure-related rescue services, a foreclosure-
146
rescue consultant may not:
147
(a) Engage in or initiate foreclosure-related rescue
148
services without first executing a written agreement with the
149
homeowner for foreclosure-related rescue services; or
150
(b) Solicit, charge, receive, or attempt to collect or
151
secure payment, directly or indirectly, for foreclosure-related
152
rescue services before completing or performing all services
153
contained in the agreement for foreclosure-related rescue
154
services.
155
(4) FORECLOSURE-RELATED RESCUE SERVICES; WRITTEN
156
AGREEMENT.--
157
(a) The written agreement for foreclosure-related rescue
158
services must be printed in at least 12-point uppercase type and
159
signed by both parties. The agreement must include the name and
160
address of the person providing foreclosure-related rescue
161
services, the exact nature and specific detail of each service to
162
be provided, the total amount and terms of charges to be paid by
163
the homeowner for the services, and the date of the agreement.
164
The date of the agreement may not be earlier than the date the
165
homeowner signed the agreement. The foreclosure-rescue consultant
166
must give the homeowner a copy of the agreement to review not
167
less than 1 business day before the homeowner is to sign the
168
agreement.
169
(b) The homeowner has the right to cancel the written
170
agreement without any penalty or obligation if the homeowner
171
cancels the agreement within 3 business days after signing the
172
written agreement. The right to cancel may not be waived by the
173
homeowner or limited in any manner by the foreclosure-rescue
174
consultant. If the homeowner cancels the agreement, any payments
175
that have been given to the foreclosure-rescue consultant must be
176
returned to the homeowner within 10 business days after receipt
177
of the notice of cancellation.
178
(c) An agreement for foreclosure-related rescue services
179
must contain, immediately above the signature line, a statement
180
in at least 12-point uppercase type that substantially complies
181
with the following:
182
183
HOMEOWNER'S RIGHT OF CANCELLATION
184
185
YOU MAY CANCEL THIS AGREEMENT FOR FORECLOSURE-RELATED RESCUE
186
SERVICES WITHOUT ANY PENALTY OR OBLIGATION WITHIN 3 BUSINESS DAYS
187
FOLLOWING THE DATE THIS AGREEMENT IS SIGNED BY YOU.
188
189
THE FORECLOSURE-RESCUE CONSULTANT IS PROHIBITED BY LAW FROM
190
ACCEPTING ANY MONEY, PROPERTY, OR OTHER FORM OF PAYMENT FROM YOU
191
UNTIL ALL PROMISED SERVICES ARE COMPLETE. IF FOR ANY REASON YOU
192
HAVE PAID THE CONSULTANT BEFORE CANCELLATION, YOUR PAYMENT MUST
193
BE RETURNED TO YOU NO LATER THAN 10 BUSINESS DAYS AFTER THE
194
CONSULTANT RECEIVES YOUR CANCELLATION NOTICE.
195
196
TO CANCEL THIS AGREEMENT, A SIGNED AND DATED COPY OF A
197
STATEMENT THAT YOU ARE CANCELLING THE AGREEMENT SHOULD BE MAILED
198
(POSTMARKED) OR DELIVERED TO ________________ (NAME) AT
199
_______________(ADDRESS) NO LATER THAN MIDNIGHT OF
200
___________(DATE).
201
202
IMPORTANT: IT IS RECOMMENDED THAT YOU CONTACT YOUR LENDER OR
203
MORTGAGE SERVICER BEFORE SIGNING THIS AGREEMENT. YOUR LENDER OR
204
MORTGAGE SERVICER MAY BE WILLING TO NEGOTIATE A PAYMENT PLAN OR A
205
RESTRUCTURING WITH YOU FREE OF CHARGE.
206
207
(d) The inclusion of the statement does not prohibit the
208
foreclosure-rescue consultant from giving the homeowner more time
209
in which to cancel the agreement than is set forth in the
210
statement, provided all other requirements of this subsection are
211
met.
212
(e) The foreclosure-rescue consultant must give the
213
homeowner a copy of the signed agreement within 3 hours after the
214
homeowner signs the agreement.
215
(5) FORECLOSURE-RESCUE TRANSACTIONS; WRITTEN AGREEMENT.--
216
(a)1. A foreclosure-rescue transaction must include a
217
written agreement prepared in at least 12-point uppercase type
218
that is completed, signed, and dated by the homeowner and the
219
equity purchaser before executing any instrument from the
220
homeowner to the equity purchaser quitclaiming, assigning,
221
transferring, conveying, or encumbering an interest in the
222
residential real property in foreclosure. The equity purchaser
223
must give the homeowner a copy of the completed agreement within
224
3 hours after the homeowner signs the agreement. The agreement
225
must contain the entire understanding of the parties and must
226
include:
227
a. The name, business address, and telephone number of the
228
equity purchaser.
229
b. The street address and full legal description of the
230
property.
231
c. Clear and conspicuous disclosure of any financial or
232
legal obligations of the homeowner that will be assumed by the
233
equity purchaser.
234
d. The total consideration to be paid by the equity
235
purchaser in connection with or incident to the acquisition of
236
the property by the equity purchaser.
237
e. The terms of payment or other consideration, including,
238
but not limited to, any services that the equity purchaser
239
represents will be performed for the homeowner before or after
240
the sale.
241
f. The date and time when possession of the property is to
242
be transferred to the equity purchaser.
243
2. A foreclosure-rescue transaction agreement must contain,
244
above the signature line, a statement in at least 12-point
245
uppercase type that substantially complies with the following:
246
247
I UNDERSTAND THAT UNDER THIS AGREEMENT I AM SELLING MY HOME
248
TO THE OTHER UNDERSIGNED PARTY.
249
250
3. A foreclosure-rescue transaction agreement must state
251
the specifications of any option or right to repurchase the
252
residential real property in foreclosure, including the specific
253
amounts of any escrow payments or deposit, down payment, purchase
254
price, closing costs, commissions, or other fees or costs.
255
4. A foreclosure-rescue transaction agreement must comply
256
with all applicable provisions of 15 U.S.C. ss. 1600 et seq. and
257
related regulations.
258
(b) The homeowner may cancel the foreclosure-rescue
259
transaction agreement without penalty if the homeowner notifies
260
the equity purchaser of such cancellation no later than 5 p.m. on
261
the 3rd business day after signing the written agreement. Any
262
moneys paid by the equity purchaser to the homeowner or by the
263
homeowner to the equity purchaser must be returned at
264
cancellation. The right to cancel does not limit or otherwise
265
affect the homeowner's right to cancel the transaction under any
266
other law. The right to cancel may not be waived by the homeowner
267
or limited in any way by the equity purchaser. The equity
268
purchaser must give the homeowner, at the time the written
269
agreement is signed, a notice of the homeowner's right to cancel
270
the foreclosure-rescue transaction as set forth in this
271
subsection. The notice, which must be set forth on a separate
272
cover sheet to the written agreement that contains no other
273
written or pictorial material, must be in at least 12-point
274
uppercase type, double-spaced, and read as follows:
275
276
NOTICE TO THE HOMEOWNER/SELLER
277
278
PLEASE READ THIS FORM COMPLETELY AND CAREFULLY. IT CONTAINS
279
VALUABLE INFORMATION REGARDING CANCELLATION RIGHTS.
280
281
BY THIS CONTRACT, YOU ARE AGREEING TO SELL YOUR HOME. YOU
282
MAY CANCEL THIS TRANSACTION AT ANY TIME BEFORE 5:00 P.M. OF THE
283
THIRD BUSINESS DAY FOLLOWING RECEIPT OF THIS NOTICE.
284
285
THIS CANCELLATION RIGHT MAY NOT BE WAIVED IN ANY MANNER BY
286
YOU OR BY THE PURCHASER.
287
288
ANY MONEY PAID DIRECTLY TO YOU BY THE PURCHASER MUST BE
289
RETURNED TO THE PURCHASER AT CANCELLATION. ANY MONEY PAID BY YOU
290
TO THE PURCHASER MUST BE RETURNED TO YOU AT CANCELLATION.
291
292
TO CANCEL, SIGN THIS FORM AND RETURN IT TO THE PURCHASER BY
293
5:00 P.M. ON ___________(DATE) AT ________________________
294
(ADDRESS) . IT IS BEST TO MAIL IT BY CERTIFIED MAIL OR OVERNIGHT
295
DELIVERY, RETURN RECEIPT REQUESTED, AND TO KEEP A PHOTOCOPY OF
296
THE SIGNED FORM AND YOUR POST OFFICE RECEIPT.
297
298
I (we) hereby cancel this transaction.
299
Seller's Signature
300
Printed Name of Seller
301
Seller's Signature
302
Printed Name of Seller
303
Date
304
305
(c) In any foreclosure-rescue transaction in which the
306
homeowner is provided the right to repurchase the residential
307
real property, the homeowner has a 30-day right to cure any
308
default of the terms of the contract with the equity purchaser,
309
and this right to cure may be exercised on up to three separate
310
occasions. The homeowner's right to cure must be included in any
311
written agreement required by this subsection.
312
(d) In any foreclosure-rescue transaction, before or at the
313
time of conveyance, the equity purchaser must fully assume or
314
discharge any lien in foreclosure as well as any prior liens that
315
will not be extinguished by the foreclosure.
316
(e) If the homeowner has the right to repurchase the
317
residential real property, the equity purchaser must verify and
318
be able to demonstrate that the homeowner has or will have a
319
reasonable ability to make the required payments to exercise the
320
option to repurchase under the written agreement. For purposes of
321
this subsection, there is a rebuttable presumption that the
322
homeowner has a reasonable ability to make the payments required
323
to repurchase the property if the homeowner's monthly payments
324
for primary housing expenses and regular monthly principal and
325
interest payments on other personal debt do not exceed 60 percent
326
of the homeowner's monthly gross income.
327
(f) If the homeowner has the right to repurchase the
328
residential real property, the price the homeowner pays may not
329
be unconscionable, unfair, or commercially unreasonable. A
330
rebuttable presumption, solely between the equity purchaser and
331
the homeowner, arises that the foreclosure-rescue transaction was
332
unconscionable if the homeowner's repurchase price is greater
333
than 17 percent per annum more than the total amount paid by the
334
equity purchaser to acquire, improve, maintain, and hold the
335
property. Unless the repurchase agreement or a memorandum of the
336
repurchase agreement is recorded in accordance with s. 695.01,
337
the presumption arising under this subsection shall not apply
338
against creditors or subsequent purchasers for a valuable
339
consideration and without notice.
340
(6) REBUTTABLE PRESUMPTION.--Any foreclosure-rescue
341
transaction involving a lease option or other repurchase
342
agreement creates a rebuttable presumption, solely between the
343
equity purchaser and the homeowner, that the transaction is a
344
loan transaction and the conveyance from the homeowner to the
345
equity purchaser is a mortgage under s. 697.01. Unless the lease
346
option or other repurchase agreement, or a memorandum of the
347
lease option or other repurchase agreement, is recorded in
348
accordance with s. 695.01, the presumption created under this
349
subsection shall not apply against creditors or subsequent
350
purchasers for a valuable consideration and without notice.
351
(7) VIOLATIONS.--A person who violates any provision of
352
this section commits an unfair and deceptive trade practice as
353
defined in part II of this chapter. Violators are subject to the
354
penalties and remedies provided in part II of this chapter,
355
including a monetary penalty not to exceed $15,000 per violation.

The FLorida foreclosure consultant house bill.

No comments: