Foreclosure Rescue Fraud Prevention Act
We have been asked often lately by clients and other professionals in the real estate field about the "new foreclosure law." This new law entitled the Foreclosure Rescue Fraud Prevention Act, Fla. Laws ch. 2008-79, will go into effect on October 1, 2008. This law will become Florida Statute sec. 501.1377.
The purpose of this new law is to prohibit certain fraudulent schemes that many homeowners facing foreclosure end up being the victims of. Foreclosure rescue is not necessarily fraudulent or even harmful, however there are some individuals using rescue techniques to fraud homeowners and make often undeserved money. Many of our clients tell us they are constantly contacted by individuals or firms that claim they can help them avoid foreclosure.
The basic provisions of this law are to:
- Provide the homeowner with the necessary information regarding the services offered and their rights;
- Prohibit misleading representations and unfair contract terms;
- Provide certain minimum requirements for any contracts including being in writing
- Provide that the rescue consultant can not charge any fees until all the services listed in the contract have been completed;
- Provide for a "cooling-off" period for the homeowner to cancel the contract or a transfer of their home; and to
- Provide that all transfers to a rescue consultant involving a lease-back or sell-back provision creates a rebuttable presumption that the transaction is a loan transaction and the conveyance is a mortgage to the equity purchaser from the homeowner.
The law covers both foreclosure-related services agreements and foreclosure-rescue transactions. For a more detailed description of this law and it's goals and effects please see our article on The Effect of the Foreclosure Rescue Fraud Prevention Act.