HB 643

1	A bill to be entitled
2	An act relating to foreclosure fraud; providing
3	legislative findings and intent with respect to the need
4	to protect homeowners who enter into agreements designed
5	to save their homes from foreclosure; providing
6	definitions; prohibiting a foreclosure-rescue consultant
7	from engaging in certain acts or failing to perform
8	contracted services; requiring that all agreements for
9	foreclosure-related rescue services and foreclosure-rescue
10	transactions be in writing; specifying information that
11	must be in the written agreement; requiring that certain
12	statements in the written agreement be in bold type, in
13	uppercase letters, and of a specified size; providing that
14	the homeowner has a right to cancel the agreement for a
15	specified period and the right may not be waived;
16	providing that the homeowner has a specified period during
17	which to cure a default under certain circumstances;
18	requiring equity purchasers to assume or discharge certain
19	liens; requiring that an equity purchaser verify the
20	homeowner's ability to make payments under a repurchase
21	agreement; providing price limitations for repurchase
22	transactions; providing that a foreclosure-rescue
23	transaction involving a lease option or other repurchase
24	agreement creates a rebuttable presumption that the
25	transaction is a loan transaction and the conveyance from
26	the homeowner to the equity purchaser is a mortgage;
27	providing that a person who violates certain provisions of
28	the act commits an unfair and deceptive trade practice as
29	defined in ch. 501, F.S.; providing penalties; providing
30	an effective date.
31
32	Be It Enacted by the Legislature of the State of Florida:
33
34	Section 1.  Legislative findings and intent.--The
35	Legislature finds that homeowners who are in default on their
36	mortgages, in foreclosure, or at risk of losing their homes due
37	to nonpayment of taxes may be vulnerable to fraud, deception,
38	and unfair dealings with foreclosure-rescue consultants or
39	foreclosure purchasers. The intent of this act is to provide a
40	homeowner with information necessary to make an informed and
41	intelligent decision regarding the sale or transfer of his or
42	her home to an equity purchaser. It is the further intent of
43	this act to require that sales agreements be expressed in
44	writing in order to safeguard homeowners against deceit and
45	financial hardship; to ensure, foster, and encourage fair
46	dealing in the sale and purchase of homes in foreclosure or
47	default; to prohibit representations that tend to mislead; to
48	prohibit or restrict unfair contract terms; to provide a
49	cooling-off period for homeowners who enter into contracts for
50	services related to saving their homes from foreclosure or
51	preserving their rights to possession of their homes; to afford
52	homeowners a reasonable and meaningful opportunity to rescind
53	sales to equity purchasers; and to preserve and protect home
54	equity for the homeowners of this state.
55	Section 2.  Definitions.--As used in this act, the term:
56	(1)  "Equity purchaser" means any person who acquires title
57	to any residential real property as a result of a foreclosure-
58	rescue transaction. The term does not apply to a person who
59	acquires the title:
60	(a)  To occupy the property as his or her primary
61	residence;
62	(b)  By a deed from a foreclosure sale conducted under
63	chapter 45, Florida Statutes;
64	(c)  At a sale of property authorized by statute;
65	(d)  By order or judgment of any court;
66	(e)  From a spouse, parent, grandparent, child, grandchild,
67	or sibling of the person or the person's spouse; or
68	(f)  As a deed in lieu of foreclosure, a workout agreement,
69	a bankruptcy plan, or any other agreement between a foreclosing
70	lender and a homeowner.
71	(2)  "Foreclosure-rescue consultant" means a person who
72	directly or indirectly makes a solicitation, representation, or
73	offer to a homeowner to provide or perform, in return for
74	payment of money or other valuable consideration, foreclosure-
75	related rescue services. The term does not apply to:
76	(a)  A person licensed to practice law in this state when
77	rendering foreclosure-related rescue services in the course of
78	his or her practice as an attorney at law.
79	(b)  A person licensed as a real estate broker under
80	chapter 475, Florida Statutes, if the person is acting within
81	the course and scope of a broker as defined in s. 475.01,
82	Florida Statutes.
83	(c)  A person licensed as a mortgage broker or mortgage
84	lender under chapter 494, Florida Statutes, if the person is
85	acting within the course and scope of a mortgage broker as
86	defined in part II of chapter 494, Florida Statutes, or a
87	mortgage lender as described in part III of chapter 494, Florida
88	Statutes.
89	(d)  A person acting under the express authority or written
90	approval of the United States Department of Housing and Urban
91	Development or other department or agency of the United States
92	or this state to provide foreclosure-related rescue services.
93	(e)  A charitable, not-for-profit agency or organization,
94	as determined by the United States Internal Revenue Service
95	under s. 501(c)(3) of the Internal Revenue Code, that offers
96	counseling or advice to an owner of residential real property in
97	foreclosure or loan default if the agency or organization does
98	not contract for foreclosure-related rescue services with a for-
99	profit lender or person facilitating or engaging in foreclosure-
100	rescue transactions.
101	(f)  A person who holds or is owed an obligation secured by
102	a lien on any residential real property in foreclosure if the
103	person performs foreclosure-related rescue services in
104	connection with this obligation or lien and the obligation or
105	lien was not the result of or part of a proposed foreclosure
106	reconveyance or foreclosure-rescue transaction.
107	(g)  A financial institution as defined in s. 655.005,
108	Florida Statutes, or any subsidiary or affiliate thereof.
109	(3)  "Foreclosure-related rescue services" means any good
110	or service related to, or promising assistance in connection
111	with:
112	(a)  Stopping, avoiding, or delaying actual or anticipated
113	foreclosure proceedings concerning residential real property; or
114	(b)  Curing or otherwise addressing a default or failure to
115	timely pay with respect to a residential mortgage loan
116	obligation.
117	(4)  "Foreclosure-rescue transaction" means a transaction:
118	(a)  By which residential real property is conveyed to an
119	equity purchaser and the homeowner maintains a legal or
120	equitable interest in the residential real property conveyed,
121	including, without limitation, a lease interest, an option to
122	acquire the property, an interest as beneficiary or trustee to a
123	land trust, or other interest in the property conveyed; and
124	(b)  That is designed or intended by the parties to stop,
125	avoid, or delay actual or anticipated foreclosure proceedings
126	against a homeowner's residential real property.
127	(5)  "Homeowner" means any record title owner of
128	residential real property that is the subject of actual or
129	anticipated foreclosure proceedings.
130	(6)  "Residential real property" means real property
131	consisting of one-family to four-family dwelling units, one of
132	which is occupied by the owner as his or her principal place of
133	residence.
134	(7)  "Residential real property in foreclosure" means
135	residential real property against which there is an outstanding
136	notice of the pendency of foreclosure recorded pursuant to s.
137	48.23, Florida Statutes, against which a summons and a complaint
138	have been served under chapter 702, Florida Statutes, or that is
139	owned by a person who is more than 90 days delinquent on any
140	loan that is secured by the property.
141	Section 3.  Prohibited acts.--In the course of offering or
142	providing foreclosure-related rescue services, a foreclosure-
143	rescue consultant, including the consultant's salespersons,
144	agents, representatives, or independent contractors, may not:
145	(1)  Engage in or initiate foreclosure-related rescue
146	services without first executing a written agreement for
147	foreclosure-related rescue services; or
148	(2)  Solicit, charge, receive, or attempt to collect or
149	secure payment, directly or indirectly, for foreclosure-related
150	rescue services before successfully completing or performing all
151	services contained in the agreement for foreclosure-related
152	rescue services.
153	Section 4.  Foreclosure-related rescue services; written
154	agreement.--
155	(1)  The written agreement for foreclosure-related rescue
156	services must be printed in at least 12-point type and signed by
157	both parties. The agreement must include the name and address of
158	the person providing foreclosure-related rescue services, the
159	exact nature and specific detail of each service to be provided,
160	the total amount and terms of charges to be paid by the
161	homeowner for the services, and the date of the agreement. The
162	date of the agreement may not be earlier than the date the
163	homeowner signed the agreement. The foreclosure-rescue
164	consultant must give the homeowner a copy of the agreement to
165	review not less than 24 hours before the homeowner is to sign
166	the agreement.
167	(2)  The written agreement must clearly state that the
168	homeowner may cancel the written agreement without any penalty
169	or obligation if the homeowner cancels the agreement within 5
170	business days after signing the written agreement. The right to
171	cancel may not be waived by the homeowner or limited in any
172	manner by the foreclosure-rescue consultant. If the homeowner
173	cancels the agreement, any payments that have been given to the
174	foreclosure-rescue consultant must be returned to the homeowner
175	within 10 days after receipt of the notice of cancellation.
176	(3)  An agreement for foreclosure-related rescue services
177	must contain, immediately above the signature line for the
178	homeowner in bold, uppercase, 14-point or larger type, the
179	following disclosures:
180
181	HOMEOWNER'S RIGHT OF CANCELLATION
182	YOU MAY CANCEL THIS AGREEMENT FOR FORECLOSURE-RELATED
183	RESCUE SERVICES WITHOUT ANY PENALTY OR OBLIGATION WITHIN 5
184	BUSINESS DAYS FOLLOWING THE DATE THIS AGREEMENT IS SIGNED BY
185	YOU.
186
187	THE FORECLOSURE-RESCUE CONSULTANT IS PROHIBITED BY LAW FROM
188	ACCEPTING ANY MONEY, PROPERTY, OR OTHER FORM OF PAYMENT FROM YOU
189	UNTIL ALL PROMISED SERVICES ARE COMPLETE. IF FOR ANY REASON YOU
190	HAVE PAID THE CONSULTANT BEFORE CANCELLATION, YOUR PAYMENT MUST
191	BE RETURNED TO YOU NO LATER THAN 10 DAYS AFTER THE CONSULTANT
192	RECEIVES YOUR CANCELLATION NOTICE.
193
194	TO CANCEL THIS AGREEMENT, A SIGNED AND DATED COPY OF A
195	STATEMENT THAT YOU ARE CANCELLING THE AGREEMENT SHOULD BE MAILED
196	(POSTMARKED) OR DELIVERED TO ________________ (NAME) AT
197	_______________(ADDRESS) NO LATER THAN MIDNIGHT OF
198	___________(DATE).
199
200	IMPORTANT: IT IS RECOMMENDED THAT YOU CONTACT YOUR LENDER
201	OR MORTGAGE SERVICE BEFORE SIGNING THIS AGREEMENT. YOUR LENDER
202	OR MORTGAGE SERVICE MAY BE WILLING TO NEGOTIATE A PAYMENT PLAN
203	WITH YOU FREE OF CHARGE.
204
205	(4)  The inclusion of the disclosures does not prohibit the
206	foreclosure-rescue consultant from giving the homeowner more
207	time in which to cancel the agreement than is set forth in the
208	disclosures.
209	(5)  The foreclosure-rescue consultant must give the
210	homeowner a copy of the signed agreement immediately after the
211	homeowner signs the agreement.
212	Section 5.  Foreclosure-rescue transactions; written
213	agreement.--
214	(1)(a)  A foreclosure-rescue transaction must include a
215	written agreement prepared in at least 12-point bold type that
216	is fully completed, signed, and dated by the homeowner and the
217	equity purchaser before executing any instrument quitclaiming,
218	assigning, transferring, conveying, or encumbering an interest
219	in the residential real property subject to foreclosure. The
220	equity purchaser must give the homeowner a copy of the completed
221	agreement immediately after the homeowner signs the agreement.
222	The agreement must contain the entire understanding of the
223	parties and must include:
224	1.  The name, business address, and telephone number of the
225	equity purchaser.
226	2.  The street address and full legal description of the
227	property.
228	3.  Clear and conspicuous disclosure of any financial or
229	legal obligations of the homeowner that will be assumed by the
230	equity purchaser.
231	4.  The total consideration to be paid by the equity
232	purchaser in connection with or incident to the acquisition of
233	the property by the equity purchaser.
234	5.  The terms of payment or other consideration, including,
235	but not limited to, any services that the equity purchaser
236	represents will be performed for the homeowner before or after
237	the sale.
238	6.  The date and time when possession of the property is to
239	be transferred to the equity purchaser.
240	(b)  Every foreclosure-rescue transaction agreement must
241	contain, above the signature line for the homeowner, a statement
242	in 16-point bold type that complies substantially with the
243	following:
244
245	I understand that under this agreement I am selling my
246	house to the other undersigned party.
247
248	(c)  Each foreclosure-rescue transaction agreement must
249	state the specifications of any option or right to repurchase
250	the residential real property in foreclosure, including the
251	specific amounts of any escrow payments or deposit, down
252	payment, purchase price, closing costs, commissions, or other
253	fees or costs.
254	(2)  An equity purchaser must give the homeowner, at the
255	time the written agreement is signed, a notice stating that the
256	homeowner may cancel the transaction without penalty if the
257	homeowner cancels the transaction within 5 business days after
258	signing the agreement. The equity purchaser must return to the
259	homeowner any moneys paid by the homeowner within 30 days after
260	the homeowner notifies the equity purchaser of such
261	cancellation. The right to cancel does not limit or otherwise
262	affect the homeowner's right to cancel the transaction under any
263	other law. The right to cancel is not conditioned upon the
264	homeowner's repayment of money paid to the homeowner under the
265	foreclosure-rescue transaction. The right to cancel may not be
266	waived by the homeowner or limited in any way by the equity
267	purchaser. Notice of the right to cancel must serve as the cover
268	sheet to the written agreement to enter into a foreclosure-
269	rescue transaction. The notice must be on a separate sheet of
270	paper with no other written or pictorial material, be in at
271	least 12-point bold, uppercase, double-spaced type, and read as
272	follows:
273
274	NOTICE TO THE HOMEOWNER/SELLER
275
276	PLEASE READ THIS FORM COMPLETELY AND CAREFULLY. IT CONTAINS
277	VALUABLE INFORMATION REGARDING CANCELLATION RIGHTS.
278
279	BY THIS CONTRACT, YOU ARE AGREEING TO SELL YOUR HOME. YOU
280	MAY CANCEL THIS TRANSACTION AT ANY TIME BEFORE 5:00 P.M. OF THE
281	FIFTH BUSINESS DAY FOLLOWING RECEIPT OF THIS NOTICE.
282
283	THIS CANCELLATION RIGHT MAY NOT BE WAIVED IN ANY MANNER BY
284	YOU OR BY THE PURCHASERS.
285
286	ANY MONEY PAID TO YOU MUST BE RETURNED TO THE PURCHASER
287	WITHIN 30 DAYS AFTER CANCELLATION.
288
289	TO CANCEL, SIGN THIS FORM AND RETURN IT TO THE PURCHASER BY
290	5:00 P.M. ON ___________(DATE)  AT ________________________
291	(ADDRESS) . IT IS BEST TO MAIL IT BY CERTIFIED MAIL OR OVERNIGHT
292	DELIVERY, RETURN RECEIPT REQUESTED, AND TO KEEP A PHOTOCOPY OF
293	THE SIGNED FORM AND YOUR POST OFFICE RECEIPT.
294
295	I (we) hereby cancel this transaction.
296	Seller's Signature     Printed Name of Seller     Seller's Signature     Printed Name of Seller
297	Printed Name of Seller     Seller's Signature     Printed Name of Seller     Date          (3)  I
298	Seller's Signature     Printed Name of Seller     Date          (3)  In any foreclosure-re
299	Printed Name of Seller     Date          (3)  In any foreclosure-rescue transaction in whic
300	Date          (3)  In any foreclosure-rescue transaction in which the
301
302	(3)  In any foreclosure-rescue transaction in which the
303	homeowner is provided the right to repurchase the residential
304	real property, the homeowner has a 30-day right to cure any
305	default of the terms of the contract, and this right to cure may
306	be exercised on at least three separate occasions during the
307	life of the foreclosure-rescue transaction or any agreement by
308	the parties. The homeowner's right to cure must be included in
309	any written agreement required by this section.
310	(4)  In any foreclosure-rescue transaction, before or at
311	the time of conveyance, the equity purchaser must fully assume
312	or discharge any lien in foreclosure as well as any prior liens
313	that will not be extinguished by the foreclosure, which
314	assumption or discharge must be accomplished without violating
315	the terms and conditions of the liens being assumed or
316	discharged.
317	(5)  If the homeowner has the right to repurchase the
318	residential real property, the equity purchaser must verify and
319	be able to demonstrate that the homeowner has or will have a
320	reasonable ability to make the required payments to exercise the
321	option to repurchase under the written agreement. For purposes
322	of this section, there is a rebuttable presumption that the
323	homeowner has a reasonable ability to make payments and to
324	repurchase the property if the homeowner's payments for primary
325	housing expenses and regular principal and interest payments on
326	other personal debt do not exceed 60 percent of the homeowner's
327	monthly gross income.
328	(6)  If the homeowner has the right to repurchase the
329	residential real property, the price the homeowner pays may not
330	be unconscionable, unfair, or commercially unreasonable. A
331	repurchase price offered within 2 years after the sale of the
332	residential real property in foreclosure that exceeds 25 percent
333	of the price at which the equity purchaser acquired the property
334	creates a rebuttable presumption that the foreclosure-rescue
335	transaction was unconscionable. The acquisition price paid by
336	the equity purchaser may include any actual costs incurred by
337	the purchaser in acquiring the property.
338	Section 6.  Rebuttable presumption.--Any foreclosure-rescue
339	transaction involving a lease option or other repurchase
340	agreement creates a rebuttable presumption that the transaction
341	is a loan transaction and the conveyance from the homeowner to
342	the equity purchaser is a mortgage.
343	Section 7.  Violations.--A person who violates any
344	provision of this act commits an unfair and deceptive trade
345	practice as defined in part II of chapter 501, Florida Statutes.
346	Violators are subject to the penalties and remedies provided in
347	part II of chapter 501, Florida Statutes, including a monetary
348	penalty not to exceed $15,000 per violation.
349	Section 8.  This act shall take effect July 1, 2008.

CODING: Words stricken are deletions; words underlined are additions.