Foreclosuer Consultant FLorida Bill

A bill to be entitled
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An act relating to foreclosure fraud; creating s.
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501.1377, F.S.; providing legislative findings and intent
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with respect to the need to protect homeowners who enter
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into agreements designed to save their homes from
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foreclosure; providing definitions; prohibiting a
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foreclosure-rescue consultant from engaging in certain
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acts or failing to perform contracted services; requiring
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that all agreements for foreclosure-related rescue
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services and foreclosure-rescue transactions be in
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writing; specifying information that must be in the
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written agreement; requiring that certain statements in
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the written agreement be in uppercase letters and of a
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specified size; providing that the homeowner has a right
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to cancel the agreement for a specified period and the
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right may not be waived; providing that the homeowner has
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a specified period during which to cure a default under
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certain circumstances; requiring equity purchasers to
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assume or discharge certain liens; requiring that an
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equity purchaser verify the homeowner's ability to make
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payments under a repurchase agreement; providing price
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limitations for repurchase transactions; providing for a
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rebuttable presumption of certain transactions being
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unconscionable under certain circumstances; providing for
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limited application of the presumption; providing an
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exclusion; providing that a foreclosure-rescue transaction
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involving a lease option or other repurchase agreement
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creates a rebuttable presumption that the transaction is a
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loan transaction and the conveyance from the homeowner to
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the equity purchaser is a mortgage; providing limited
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application of the presumption; providing an exclusion;
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providing that a person who violates certain provisions
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commits an unfair and deceptive trade practice as defined
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in part II of ch. 501, F.S.; providing penalties;
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repealing s. 501.2078, F.S., relating to violations
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involving individual homeowners during the course of
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residential foreclosure proceedings; providing an
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effective date.
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Be It Enacted by the Legislature of the State of Florida:
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Section 1. Section 501.1377, Florida Statutes, is created
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to read:
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501.1377 Violations involving homeowners during the course
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of residential foreclosure proceedings.--
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(1) LEGISLATIVE FINDINGS AND INTENT.--The Legislature finds
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that homeowners who are in default on their mortgages, in
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foreclosure, or at risk of losing their homes due to nonpayment
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of taxes may be vulnerable to fraud, deception, and unfair
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dealings with foreclosure-rescue consultants or equity
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purchasers. The intent of this section is to provide a homeowner
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with information necessary to make an informed decision regarding
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the sale or transfer of his or her home to an equity purchaser.
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It is the further intent of this section to require that
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foreclosure-related rescue services agreements be expressed in
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writing in order to safeguard homeowners against deceit and
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financial hardship; to ensure, foster, and encourage fair dealing
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in the sale and purchase of homes in foreclosure or default; to
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prohibit representations that tend to mislead; to prohibit or
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restrict unfair contract terms; to provide a cooling-off period
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for homeowners who enter into contracts for services related to
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saving their homes from foreclosure or preserving their rights to
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possession of their homes; to afford homeowners a reasonable and
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meaningful opportunity to rescind sales to equity purchasers; and
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to preserve and protect home equity for the homeowners of this
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state.
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(2) DEFINITIONS.--As used in this section, the term:
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(a) "Equity purchaser" means any person who acquires a
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legal, equitable, or beneficial ownership interest in any
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residential real property as a result of a foreclosure-rescue
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transaction. The term does not apply to a person who acquires the
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legal, equitable, or beneficial interest in such property:
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1. By a certificate of title from a foreclosure sale
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conducted under chapter 45;
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2. At a sale of property authorized by statute;
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3. By order or judgment of any court;
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4. From a spouse, parent, grandparent, child, grandchild,
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or sibling of the person or the person's spouse; or
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5. As a deed in lieu of foreclosure, a workout agreement, a
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bankruptcy plan, or any other agreement between a foreclosing
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lender and a homeowner.
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(b) "Foreclosure-rescue consultant" means a person who
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directly or indirectly makes a solicitation, representation, or
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offer to a homeowner to provide or perform, in return for payment
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of money or other valuable consideration, foreclosure-related
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rescue services. The term does not apply to:
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1. A person excluded under s. 501.212.
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2. A person acting under the express authority or written
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approval of the United States Department of Housing and Urban
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Development or other department or agency of the United States or
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this state to provide foreclosure-related rescue services.
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3. A charitable, not-for-profit agency or organization, as
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determined by the United States Internal Revenue Service under s.
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501(c)(3) of the Internal Revenue Code, which offers counseling
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or advice to an owner of residential real property in foreclosure
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or loan default if the agency or organization does not contract
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for foreclosure-related rescue services with a for-profit lender
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or person facilitating or engaging in foreclosure-rescue
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transactions.
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4. A person who holds or is owed an obligation secured by a
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lien on any residential real property in foreclosure if the
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person performs foreclosure-related rescue services in connection
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with this obligation or lien and the obligation or lien was not
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the result of or part of a proposed foreclosure reconveyance or
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foreclosure-rescue transaction.
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5. A financial institution as defined in s. 655.005 and any
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parent or subsidiary of the financial institution or of the
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parent or subsidiary.
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6. A licensed mortgage broker, mortgage lender, or
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correspondent mortgage lender that provides mortgage counseling
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or advice regarding residential real property in foreclosure,
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which counseling or advice is within the scope of services set
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forth in chapter 494 and is provided without payment of money or
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other consideration other than a mortgage brokerage fee as
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defined in s. 494.001.
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(c) "Foreclosure-related rescue services" means any good or
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service related to, or promising assistance in connection with:
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1. Stopping, avoiding, or delaying foreclosure proceedings
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concerning residential real property; or
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2. Curing or otherwise addressing a default or failure to
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timely pay with respect to a residential mortgage loan
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obligation.
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(d) "Foreclosure-rescue transaction" means a transaction:
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1. By which residential real property in foreclosure is
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conveyed to an equity purchaser and the homeowner maintains a
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legal or equitable interest in the residential real property
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conveyed, including, without limitation, a lease option interest,
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an option to acquire the property, an interest as beneficiary or
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trustee to a land trust, or other interest in the property
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conveyed; and
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2. That is designed or intended by the parties to stop,
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avoid, or delay foreclosure proceedings against a homeowner's
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residential real property.
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(e) "Homeowner" means any record title owner of residential
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real property that is the subject of foreclosure proceedings.
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(f) "Residential real property" means real property
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consisting of one-family to four-family dwelling units, one of
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which is occupied by the owner as his or her principal place of
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residence.
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(g) "Residential real property in foreclosure" means
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residential real property against which there is an outstanding
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notice of the pendency of foreclosure proceedings recorded
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pursuant to s. 48.23.
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(3) PROHIBITED ACTS.--In the course of offering or
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providing foreclosure-related rescue services, a foreclosure-
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rescue consultant may not:
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(a) Engage in or initiate foreclosure-related rescue
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services without first executing a written agreement with the
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homeowner for foreclosure-related rescue services; or
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(b) Solicit, charge, receive, or attempt to collect or
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secure payment, directly or indirectly, for foreclosure-related
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rescue services before completing or performing all services
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contained in the agreement for foreclosure-related rescue
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services.
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(4) FORECLOSURE-RELATED RESCUE SERVICES; WRITTEN
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AGREEMENT.--
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(a) The written agreement for foreclosure-related rescue
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services must be printed in at least 12-point uppercase type and
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signed by both parties. The agreement must include the name and
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address of the person providing foreclosure-related rescue
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services, the exact nature and specific detail of each service to
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be provided, the total amount and terms of charges to be paid by
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the homeowner for the services, and the date of the agreement.
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The date of the agreement may not be earlier than the date the
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homeowner signed the agreement. The foreclosure-rescue consultant
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must give the homeowner a copy of the agreement to review not
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less than 1 business day before the homeowner is to sign the
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agreement.
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(b) The homeowner has the right to cancel the written
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agreement without any penalty or obligation if the homeowner
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cancels the agreement within 3 business days after signing the
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written agreement. The right to cancel may not be waived by the
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homeowner or limited in any manner by the foreclosure-rescue
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consultant. If the homeowner cancels the agreement, any payments
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that have been given to the foreclosure-rescue consultant must be
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returned to the homeowner within 10 business days after receipt
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of the notice of cancellation.
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(c) An agreement for foreclosure-related rescue services
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must contain, immediately above the signature line, a statement
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in at least 12-point uppercase type that substantially complies
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with the following:
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HOMEOWNER'S RIGHT OF CANCELLATION
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YOU MAY CANCEL THIS AGREEMENT FOR FORECLOSURE-RELATED RESCUE
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SERVICES WITHOUT ANY PENALTY OR OBLIGATION WITHIN 3 BUSINESS DAYS
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FOLLOWING THE DATE THIS AGREEMENT IS SIGNED BY YOU.
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THE FORECLOSURE-RESCUE CONSULTANT IS PROHIBITED BY LAW FROM
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ACCEPTING ANY MONEY, PROPERTY, OR OTHER FORM OF PAYMENT FROM YOU
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UNTIL ALL PROMISED SERVICES ARE COMPLETE. IF FOR ANY REASON YOU
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HAVE PAID THE CONSULTANT BEFORE CANCELLATION, YOUR PAYMENT MUST
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BE RETURNED TO YOU NO LATER THAN 10 BUSINESS DAYS AFTER THE
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CONSULTANT RECEIVES YOUR CANCELLATION NOTICE.
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TO CANCEL THIS AGREEMENT, A SIGNED AND DATED COPY OF A
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STATEMENT THAT YOU ARE CANCELLING THE AGREEMENT SHOULD BE MAILED
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(POSTMARKED) OR DELIVERED TO ________________ (NAME) AT
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_______________(ADDRESS) NO LATER THAN MIDNIGHT OF
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___________(DATE).
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IMPORTANT: IT IS RECOMMENDED THAT YOU CONTACT YOUR LENDER OR
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MORTGAGE SERVICER BEFORE SIGNING THIS AGREEMENT. YOUR LENDER OR
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MORTGAGE SERVICER MAY BE WILLING TO NEGOTIATE A PAYMENT PLAN OR A
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RESTRUCTURING WITH YOU FREE OF CHARGE.
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(d) The inclusion of the statement does not prohibit the
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foreclosure-rescue consultant from giving the homeowner more time
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in which to cancel the agreement than is set forth in the
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statement, provided all other requirements of this subsection are
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met.
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(e) The foreclosure-rescue consultant must give the
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homeowner a copy of the signed agreement within 3 hours after the
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homeowner signs the agreement.
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(5) FORECLOSURE-RESCUE TRANSACTIONS; WRITTEN AGREEMENT.--
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(a)1. A foreclosure-rescue transaction must include a
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written agreement prepared in at least 12-point uppercase type
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that is completed, signed, and dated by the homeowner and the
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equity purchaser before executing any instrument from the
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homeowner to the equity purchaser quitclaiming, assigning,
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transferring, conveying, or encumbering an interest in the
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residential real property in foreclosure. The equity purchaser
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must give the homeowner a copy of the completed agreement within
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3 hours after the homeowner signs the agreement. The agreement
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must contain the entire understanding of the parties and must
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include:
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a. The name, business address, and telephone number of the
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equity purchaser.
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b. The street address and full legal description of the
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property.
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c. Clear and conspicuous disclosure of any financial or
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legal obligations of the homeowner that will be assumed by the
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equity purchaser.
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d. The total consideration to be paid by the equity
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purchaser in connection with or incident to the acquisition of
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the property by the equity purchaser.
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e. The terms of payment or other consideration, including,
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but not limited to, any services that the equity purchaser
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represents will be performed for the homeowner before or after
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the sale.
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f. The date and time when possession of the property is to
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be transferred to the equity purchaser.
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2. A foreclosure-rescue transaction agreement must contain,
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above the signature line, a statement in at least 12-point
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uppercase type that substantially complies with the following:
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I UNDERSTAND THAT UNDER THIS AGREEMENT I AM SELLING MY HOME
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TO THE OTHER UNDERSIGNED PARTY.
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3. A foreclosure-rescue transaction agreement must state
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the specifications of any option or right to repurchase the
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residential real property in foreclosure, including the specific
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amounts of any escrow payments or deposit, down payment, purchase
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price, closing costs, commissions, or other fees or costs.
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4. A foreclosure-rescue transaction agreement must comply
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with all applicable provisions of 15 U.S.C. ss. 1600 et seq. and
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related regulations.
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(b) The homeowner may cancel the foreclosure-rescue
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transaction agreement without penalty if the homeowner notifies
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the equity purchaser of such cancellation no later than 5 p.m. on
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the 3rd business day after signing the written agreement. Any
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moneys paid by the equity purchaser to the homeowner or by the
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homeowner to the equity purchaser must be returned at
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cancellation. The right to cancel does not limit or otherwise
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affect the homeowner's right to cancel the transaction under any
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other law. The right to cancel may not be waived by the homeowner
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or limited in any way by the equity purchaser. The equity
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purchaser must give the homeowner, at the time the written
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agreement is signed, a notice of the homeowner's right to cancel
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the foreclosure-rescue transaction as set forth in this
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subsection. The notice, which must be set forth on a separate
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cover sheet to the written agreement that contains no other
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written or pictorial material, must be in at least 12-point
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uppercase type, double-spaced, and read as follows:
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NOTICE TO THE HOMEOWNER/SELLER
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PLEASE READ THIS FORM COMPLETELY AND CAREFULLY. IT CONTAINS
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VALUABLE INFORMATION REGARDING CANCELLATION RIGHTS.
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BY THIS CONTRACT, YOU ARE AGREEING TO SELL YOUR HOME. YOU
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MAY CANCEL THIS TRANSACTION AT ANY TIME BEFORE 5:00 P.M. OF THE
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THIRD BUSINESS DAY FOLLOWING RECEIPT OF THIS NOTICE.
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THIS CANCELLATION RIGHT MAY NOT BE WAIVED IN ANY MANNER BY
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YOU OR BY THE PURCHASER.
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ANY MONEY PAID DIRECTLY TO YOU BY THE PURCHASER MUST BE
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RETURNED TO THE PURCHASER AT CANCELLATION. ANY MONEY PAID BY YOU
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TO THE PURCHASER MUST BE RETURNED TO YOU AT CANCELLATION.
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TO CANCEL, SIGN THIS FORM AND RETURN IT TO THE PURCHASER BY
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5:00 P.M. ON ___________(DATE) AT ________________________
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(ADDRESS) . IT IS BEST TO MAIL IT BY CERTIFIED MAIL OR OVERNIGHT
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DELIVERY, RETURN RECEIPT REQUESTED, AND TO KEEP A PHOTOCOPY OF
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THE SIGNED FORM AND YOUR POST OFFICE RECEIPT.
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I (we) hereby cancel this transaction.
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Seller's Signature
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Printed Name of Seller
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Seller's Signature
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Printed Name of Seller
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Date
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(c) In any foreclosure-rescue transaction in which the
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homeowner is provided the right to repurchase the residential
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real property, the homeowner has a 30-day right to cure any
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default of the terms of the contract with the equity purchaser,
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and this right to cure may be exercised on up to three separate
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occasions. The homeowner's right to cure must be included in any
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written agreement required by this subsection.
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(d) In any foreclosure-rescue transaction, before or at the
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time of conveyance, the equity purchaser must fully assume or
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discharge any lien in foreclosure as well as any prior liens that
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will not be extinguished by the foreclosure.
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(e) If the homeowner has the right to repurchase the
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residential real property, the equity purchaser must verify and
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be able to demonstrate that the homeowner has or will have a
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reasonable ability to make the required payments to exercise the
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option to repurchase under the written agreement. For purposes of
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this subsection, there is a rebuttable presumption that the
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homeowner has a reasonable ability to make the payments required
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to repurchase the property if the homeowner's monthly payments
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for primary housing expenses and regular monthly principal and
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interest payments on other personal debt do not exceed 60 percent
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of the homeowner's monthly gross income.
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(f) If the homeowner has the right to repurchase the
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residential real property, the price the homeowner pays may not
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be unconscionable, unfair, or commercially unreasonable. A
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rebuttable presumption, solely between the equity purchaser and
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the homeowner, arises that the foreclosure-rescue transaction was
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unconscionable if the homeowner's repurchase price is greater
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than 17 percent per annum more than the total amount paid by the
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equity purchaser to acquire, improve, maintain, and hold the
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property. Unless the repurchase agreement or a memorandum of the
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repurchase agreement is recorded in accordance with s. 695.01,
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the presumption arising under this subsection shall not apply
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against creditors or subsequent purchasers for a valuable
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consideration and without notice.
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(6) REBUTTABLE PRESUMPTION.--Any foreclosure-rescue
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transaction involving a lease option or other repurchase
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agreement creates a rebuttable presumption, solely between the
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equity purchaser and the homeowner, that the transaction is a
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loan transaction and the conveyance from the homeowner to the
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equity purchaser is a mortgage under s. 697.01. Unless the lease
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option or other repurchase agreement, or a memorandum of the
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lease option or other repurchase agreement, is recorded in
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accordance with s. 695.01, the presumption created under this
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subsection shall not apply against creditors or subsequent
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purchasers for a valuable consideration and without notice.
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(7) VIOLATIONS.--A person who violates any provision of
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this section commits an unfair and deceptive trade practice as
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defined in part II of this chapter. Violators are subject to the
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penalties and remedies provided in part II of this chapter,
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including a monetary penalty not to exceed $15,000 per violation.

The FLorida foreclosure consultant house bill.