Florida declares was on ‘rescue fraud’
A new law to protect
The Foreclosure Rescue Fraud Prevention Act of 2008, which goes into effect Oct. 1, ensures that homeowners are properly informed about their rights before signing a contract with a foreclosure rescue firm. The action comes as foreclosure fillings are soaring in
Last year the Attorney General's Office formed a task force to investigate foreclosure rescue firms suspected of violating the State's deceptive and unfair trade laws, months after the South Florida Sun-Sentinel published a story about homeowners who claimed they had been taken in by a
Who stands to benefit?
Homeowners facing foreclosure who may be tempted to work with an independent rescue firm.
What does the law provide?
The law requires a foreclosure rescue consultant — a person who tries to arrange a new payment plan with a lender or other alternative to home foreclosure — to provide a written agreement to homeowners before beginning any services.
The agreement must include a specific notice of the homeowners' right to cancel the contract, detail the procedure for canceling and a disclosure that the consumer should contact his lender first before signing a contract because the lender may be willing to negotiate a payment plan free of charge. Violators would face up to $15,000 in Fines for each infraction.
What new regulations does it put into place?
The new regulations require specific legal definitions for job titles such as "equity purchaser" or "foreclosure consultant," and prohibit foreclosure consultants from accepting payment until all services are completed.
It requires a five-day period in which consumers can cancel a foreclosure-rescue contract. And before any instrument that transfers title to the property can be executed, the homeowner must execute a separate contract with all the terms and conditions of the proposed property transfer.