Foreclosure Consultant Florida

1
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
47
finds 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
53
regarding the sale or transfer of his or her home to an equity
54
purchaser. It is the further intent of this section to require
55
that foreclosure-related rescue services agreements be expressed
56
in writing in order to safeguard homeowners against deceit and
57
financial hardship; to ensure, foster, and encourage fair
58
dealing in the sale and purchase of homes in foreclosure or
59
default; to prohibit representations that tend to mislead; to
60
prohibit or restrict unfair contract terms; to provide a
61
cooling-off period for homeowners who enter into contracts for
62
services related to saving their homes from foreclosure or
63
preserving their rights to possession of their homes; to afford
64
homeowners a reasonable and meaningful opportunity to rescind
65
sales to equity purchasers; and to preserve and protect home
66
equity for the homeowners of this 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
72
the 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,
80
a 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
85
payment of money or other valuable consideration, foreclosure-
86
related 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
91
or 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
94
s. 501(c)(3) of the Internal Revenue Code, which offers
95
counseling or advice to an owner of residential real property in
96
foreclosure or loan default if the agency or organization does
97
not contract for foreclosure-related rescue services with a for-
98
profit lender or person facilitating or engaging in foreclosure-
99
rescue transactions.
100
4. A person who holds or is owed an obligation secured by
101
a lien on any residential real property in foreclosure if the
102
person performs foreclosure-related rescue services in
103
connection with this obligation or lien and the obligation or
104
lien was not the result of or part of a proposed foreclosure
105
reconveyance or foreclosure-rescue transaction.
106
5. A financial institution as defined in s. 655.005 and
107
any 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
117
or service related to, or promising assistance in connection
118
with:
119
1. Stopping, avoiding, or delaying foreclosure proceedings
120
concerning residential real property; or
121
2. Curing or otherwise addressing a default or failure to
122
timely pay with respect to a residential mortgage loan
123
obligation.
124
(d) "Foreclosure-rescue transaction" means a transaction:
125
1. By which residential real property in foreclosure is
126
conveyed to an equity purchaser and the homeowner maintains a
127
legal or equitable interest in the residential real property
128
conveyed, including, without limitation, a lease option
129
interest, an option to acquire the property, an interest as
130
beneficiary or trustee to a land trust, or other interest in the
131
property conveyed; and
132
2. That is designed or intended by the parties to stop,
133
avoid, or delay foreclosure proceedings against a homeowner's
134
residential real property.
135
(e) "Homeowner" means any record title owner of
136
residential real property that is the subject of foreclosure
137
proceedings.
138
(f) "Residential real property" means real property
139
consisting of one-family to four-family dwelling units, one of
140
which is occupied by the owner as his or her principal place of
141
residence.
142
(g) "Residential real property in foreclosure" means
143
residential real property against which there is an outstanding
144
notice of the pendency of foreclosure proceedings recorded
145
pursuant to s. 48.23.
146
(3) PROHIBITED ACTS.--In the course of offering or
147
providing foreclosure-related rescue services, a foreclosure-
148
rescue consultant may not:
149
(a) Engage in or initiate foreclosure-related rescue
150
services without first executing a written agreement with the
151
homeowner for foreclosure-related rescue services; or
152
(b) Solicit, charge, receive, or attempt to collect or
153
secure payment, directly or indirectly, for foreclosure-related
154
rescue services before completing or performing all services
155
contained in the agreement for foreclosure-related rescue
156
services.
157
(4) FORECLOSURE-RELATED RESCUE SERVICES; WRITTEN
158
AGREEMENT.--
159
(a) The written agreement for foreclosure-related rescue
160
services must be printed in at least 12-point uppercase type and
161
signed by both parties. The agreement must include the name and
162
address of the person providing foreclosure-related rescue
163
services, the exact nature and specific detail of each service
164
to be provided, the total amount and terms of charges to be paid
165
by the homeowner for the services, and the date of the
166
agreement. The date of the agreement may not be earlier than the
167
date the homeowner signed the agreement. The foreclosure-rescue
168
consultant must give the homeowner a copy of the agreement to
169
review not less than 1 business day before the homeowner is to
170
sign the agreement.
171
(b) The homeowner has the right to cancel the written
172
agreement without any penalty or obligation if the homeowner
173
cancels the agreement within 3 business days after signing the
174
written agreement. The right to cancel may not be waived by the
175
homeowner or limited in any manner by the foreclosure-rescue
176
consultant. If the homeowner cancels the agreement, any payments
177
that have been given to the foreclosure-rescue consultant must
178
be returned to the homeowner within 10 business days after
179
receipt of the notice of cancellation.
180
(c) An agreement for foreclosure-related rescue services
181
must contain, immediately above the signature line, a statement
182
in at least 12-point uppercase type that substantially complies
183
with the following:
184
185
HOMEOWNER'S RIGHT OF CANCELLATION
186
187
YOU MAY CANCEL THIS AGREEMENT FOR FORECLOSURE-RELATED
188
RESCUE SERVICES WITHOUT ANY PENALTY OR OBLIGATION WITHIN 3
189
BUSINESS DAYS FOLLOWING THE DATE THIS AGREEMENT IS SIGNED BY
190
YOU.
191
192
THE FORECLOSURE-RESCUE CONSULTANT IS PROHIBITED BY LAW FROM
193
ACCEPTING ANY MONEY, PROPERTY, OR OTHER FORM OF PAYMENT FROM YOU
194
UNTIL ALL PROMISED SERVICES ARE COMPLETE. IF FOR ANY REASON YOU
195
HAVE PAID THE CONSULTANT BEFORE CANCELLATION, YOUR PAYMENT MUST
196
BE RETURNED TO YOU NO LATER THAN 10 BUSINESS DAYS AFTER THE
197
CONSULTANT RECEIVES YOUR CANCELLATION NOTICE.
198
199
TO CANCEL THIS AGREEMENT, A SIGNED AND DATED COPY OF A
200
STATEMENT THAT YOU ARE CANCELLING THE AGREEMENT SHOULD BE MAILED
201
(POSTMARKED) OR DELIVERED TO ________________ (NAME) AT
202
_______________(ADDRESS) NO LATER THAN MIDNIGHT OF
203
___________(DATE).
204
205
IMPORTANT: IT IS RECOMMENDED THAT YOU CONTACT YOUR LENDER
206
OR MORTGAGE SERVICER BEFORE SIGNING THIS AGREEMENT. YOUR LENDER
207
OR MORTGAGE SERVICER MAY BE WILLING TO NEGOTIATE A PAYMENT PLAN
208
OR A RESTRUCTURING WITH YOU FREE OF CHARGE.
209
210
(d) The inclusion of the statement does not prohibit the
211
foreclosure-rescue consultant from giving the homeowner more
212
time in which to cancel the agreement than is set forth in the
213
statement, provided all other requirements of this subsection
214
are met.
215
(e) The foreclosure-rescue consultant must give the
216
homeowner a copy of the signed agreement within 3 hours after
217
the homeowner signs the agreement.
218
(5) FORECLOSURE-RESCUE TRANSACTIONS; WRITTEN AGREEMENT.--
219
(a)1. A foreclosure-rescue transaction must include a
220
written agreement prepared in at least 12-point uppercase type
221
that is completed, signed, and dated by the homeowner and the
222
equity purchaser before executing any instrument from the
223
homeowner to the equity purchaser quitclaiming, assigning,
224
transferring, conveying, or encumbering an interest in the
225
residential real property in foreclosure. The equity purchaser
226
must give the homeowner a copy of the completed agreement within
227
3 hours after the homeowner signs the agreement. The agreement
228
must contain the entire understanding of the parties and must
229
include:
230
a. The name, business address, and telephone number of the
231
equity purchaser.
232
b. The street address and full legal description of the
233
property.
234
c. Clear and conspicuous disclosure of any financial or
235
legal obligations of the homeowner that will be assumed by the
236
equity purchaser.
237
d. The total consideration to be paid by the equity
238
purchaser in connection with or incident to the acquisition of
239
the property by the equity purchaser.
240
e. The terms of payment or other consideration, including,
241
but not limited to, any services that the equity purchaser
242
represents will be performed for the homeowner before or after
243
the sale.
244
f. The date and time when possession of the property is to
245
be transferred to the equity purchaser.
246
2. A foreclosure-rescue transaction agreement must
247
contain, above the signature line, a statement in at least 12-
248
point uppercase type that substantially complies with the
249
following:
250
251
I UNDERSTAND THAT UNDER THIS AGREEMENT I AM SELLING MY HOME
252
TO THE OTHER UNDERSIGNED PARTY.
253
254
3. A foreclosure-rescue transaction agreement must state
255
the specifications of any option or right to repurchase the
256
residential real property in foreclosure, including the specific
257
amounts of any escrow payments or deposit, down payment,
258
purchase price, closing costs, commissions, or other fees or
259
costs.
260
4. A foreclosure-rescue transaction agreement must comply
261
with all applicable provisions of 15 U.S.C. ss. 1600 et seq. and
262
related regulations.
263
(b) The homeowner may cancel the foreclosure-rescue
264
transaction agreement without penalty if the homeowner notifies
265
the equity purchaser of such cancellation no later than 5 p.m.
266
on the 3rd business day after signing the written agreement. Any
267
moneys paid by the equity purchaser to the homeowner or by the
268
homeowner to the equity purchaser must be returned at
269
cancellation. The right to cancel does not limit or otherwise
270
affect the homeowner's right to cancel the transaction under any
271
other law. The right to cancel may not be waived by the
272
homeowner or limited in any way by the equity purchaser. The
273
equity purchaser must give the homeowner, at the time the
274
written agreement is signed, a notice of the homeowner's right
275
to cancel the foreclosure-rescue transaction as set forth in
276
this subsection. The notice, which must be set forth on a
277
separate cover sheet to the written agreement that contains no
278
other written or pictorial material, must be in at least 12-
279
point uppercase type, double-spaced, and read as follows:
280
281
NOTICE TO THE HOMEOWNER/SELLER
282
283
PLEASE READ THIS FORM COMPLETELY AND CAREFULLY. IT CONTAINS
284
VALUABLE INFORMATION REGARDING CANCELLATION RIGHTS.
285
286
BY THIS CONTRACT, YOU ARE AGREEING TO SELL YOUR HOME. YOU
287
MAY CANCEL THIS TRANSACTION AT ANY TIME BEFORE 5:00 P.M. OF THE
288
THIRD BUSINESS DAY FOLLOWING RECEIPT OF THIS NOTICE.
289
290
THIS CANCELLATION RIGHT MAY NOT BE WAIVED IN ANY MANNER BY
291
YOU OR BY THE PURCHASER.
292
293
ANY MONEY PAID DIRECTLY TO YOU BY THE PURCHASER MUST BE
294
RETURNED TO THE PURCHASER AT CANCELLATION. ANY MONEY PAID BY YOU
295
TO THE PURCHASER MUST BE RETURNED TO YOU AT CANCELLATION.
296
297
TO CANCEL, SIGN THIS FORM AND RETURN IT TO THE PURCHASER BY
298
5:00 P.M. ON ___________(DATE) AT ________________________
299
(ADDRESS) . IT IS BEST TO MAIL IT BY CERTIFIED MAIL OR OVERNIGHT
300
DELIVERY, RETURN RECEIPT REQUESTED, AND TO KEEP A PHOTOCOPY OF
301
THE SIGNED FORM AND YOUR POST OFFICE RECEIPT.
302
303
I (we) hereby cancel this transaction.
304
Seller's Signature
305
Printed Name of Seller
306
Seller's Signature
307
Printed Name of Seller
308
Date
309
310
(c) In any foreclosure-rescue transaction in which the
311
homeowner is provided the right to repurchase the residential
312
real property, the homeowner has a 30-day right to cure any
313
default of the terms of the contract with the equity purchaser,
314
and this right to cure may be exercised on up to three separate
315
occasions. The homeowner's right to cure must be included in any
316
written agreement required by this subsection.
317
(d) In any foreclosure-rescue transaction, before or at
318
the time of conveyance, the equity purchaser must fully assume
319
or discharge any lien in foreclosure as well as any prior liens
320
that will not be extinguished by the foreclosure.
321
(e) If the homeowner has the right to repurchase the
322
residential real property, the equity purchaser must verify and
323
be able to demonstrate that the homeowner has or will have a
324
reasonable ability to make the required payments to exercise the
325
option to repurchase under the written agreement. For purposes
326
of this subsection, there is a rebuttable presumption that the
327
homeowner has a reasonable ability to make the payments required
328
to repurchase the property if the homeowner's monthly payments
329
for primary housing expenses and regular monthly principal and
330
interest payments on other personal debt do not exceed 60
331
percent of the homeowner's monthly gross income.
332
(f) If the homeowner has the right to repurchase the
333
residential real property, the price the homeowner pays may not
334
be unconscionable, unfair, or commercially unreasonable. A
335
rebuttable presumption, solely between the equity purchaser and
336
the homeowner, arises that the foreclosure-rescue transaction
337
was unconscionable if the homeowner's repurchase price is
338
greater than 17 percent per annum more than the total amount
339
paid by the equity purchaser to acquire, improve, maintain, and
340
hold the property. Unless the repurchase agreement or a
341
memorandum of the repurchase agreement is recorded in accordance
342
with s. 695.01, the presumption arising under this subsection
343
shall not apply against creditors or subsequent purchasers for a
344
valuable consideration and without notice.
345
(6) REBUTTABLE PRESUMPTION.--Any foreclosure-rescue
346
transaction involving a lease option or other repurchase
347
agreement creates a rebuttable presumption, solely between the
348
equity purchaser and the homeowner, that the transaction is a
349
loan transaction and the conveyance from the homeowner to the
350
equity purchaser is a mortgage under s. 697.01. Unless the lease
351
option or other repurchase agreement, or a memorandum of the
352
lease option or other repurchase agreement, is recorded in
353
accordance with s. 695.01, the presumption created under this
354
subsection shall not apply against creditors or subsequent
355
purchasers for a valuable consideration and without notice.
356
(7) VIOLATIONS.--A person who violates any provision of
357
this section commits an unfair and deceptive trade practice as
358
defined in part II of this chapter. Violators are subject to the
359
penalties and remedies provided in part II of this chapter,
360
including a monetary penalty not to exceed $15,000 per
361
violation.
362
Section 2. Section 501.2078, Florida Statutes, is
363
repealed.
364
Section 3. This act shall take effect October 1, 2008.