Attorney General McCollum Applauds Signing of Foreclosure Rescue Fraud Prevention Act into Law

~New law provides important safeguards to help protect homeowners facing
foreclosure~

TALLAHASSEE, FL (Lawfuel) – Attorney General Bill McCollum today applauded Governor Charlie Crist for signing The Foreclosure Rescue Fraud Prevention Act of 2008 into law. The legislation, which passed this session as HB 643 and was developed in part by members of the Attorney General’s Mortgage Fraud Task Force, will ensure that homeowners are properly informed about their rights before signing a contract with a foreclosure rescue entity in addition to other protections.

“Florida homeowners now have an important tool to protect their most
valuable possession – their homes,” said Attorney General McCollum. “By
protecting our citizens who face the threat of foreclosure from those
individuals who would prey on them, this law will ensure that homeowners
will not be further victimized at a time of personal financial crisis.”

The Foreclosure Rescue Fraud Prevention Act of 2008 requires that a
foreclosure rescue consultant – a person who tries to arrange a new
payment plan with lender or other alternative to foreclosure – provide a
written agreement to the consumer and obtain the consumer’s signature
before beginning any services. The legislation further requires the rescue
consultant to include in the written agreement a specific notice of the
homeowners’ right to cancel, including the procedure for cancelling, and a
disclosure that the consumer should contact his or her lender first before
signing because the lender may be willing to negotiate a payment plan free
of charge.

“Desperate homeowners on the brink of losing their homes are grasping for
any assistance available, and too many of them are falling victim to scam
artists,” said Sen. Mike Fasano, R- New Port Richey, the bill’s Senate
sponsor. “This legislation provides much-needed safeguards to assist
families in staying in their homes.”

“This new law will protect homeowners from unscrupulous people who would
try to prey upon them in their time of distress,” said House sponsor Rep.
Clay Ford, R-Pensacola. “The Foreclosure Rescue Fraud Prevention Act
includes key requirements to help homeowners avoid costly mistakes.”

Last year, as a result of substantial increases in interest rates and
monthly housing costs, more than 245,000 mortgage foreclosures occurred in
Florida. This ranks the Sunshine State second in the nation in the number
of foreclosures. Florida also had the highest rate of mortgage fraud last
year and as the number of Floridians facing foreclosure increases, so does
the number and variety of scams devised to defraud these vulnerable
consumers.

“Our state has taken a good first step toward protecting Floridians from
unscrupulous fraud artists who prey on those most vulnerable to the
current downturn in housing and credit markets,” said Lori Parham, AARP’s
Florida state director. “AARP applauds Attorney General McCollum, Sen.
Fasano and Rep. Ford for their leadership on behalf of consumers.”

Additional provisions in the new law require that before any instrument
that transfers title to the property can be executed, the buyer (investor)
must execute a separate contract with all the terms and conditions of the
proposed property transfer. If the transaction takes place and the
homeowner is remaining in the home and making payments to the new owner,
the homeowner is afforded a 30-day right to cure any default of the terms
of the repurchase agreement. The repurchase price cannot exceed a certain
threshold and the repurchase agreement is presumed to be a loan. The
Foreclosure Rescue Fraud Prevention Act of 2008 will go into effect
October 1.

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