The Florida Legislature recently found that homeowners who are in default on their mortgages, in foreclosure, or at risk of losing their homes due to nonpayment of taxes may be vulnerable to fraud, deception, and unfair dealings with foreclosure-rescue consultants or equity purchasers.
In response, the Legislature passed Chapter 501.1377, The Foreclosure Rescue Fraud Prevention Act, (the full text can be found here) the intent of which is to provide a homeowner with information necessary to make an informed decision regarding the sale or transfer of his or her home to an equity purchaser. It is the further the intent of the law to require that foreclosure-related rescue services agreements be expressed in writing in order to safeguard homeowners against deceit and financial hardship; to ensure, foster, and encourage fair dealing in the sale and purchase of homes in foreclosure or default; to prohibit representations that tend to mislead; to prohibit or restrict unfair contract terms.
Under the law an “Equity purchaser” means a person who acquires a legal, equitable, or beneficial ownership interest in any residential real property as a result of a foreclosure-rescue transaction.
A “Foreclosure-rescue consultant” is a person who directly or indirectly makes a solicitation, representation, or offer to a homeowner to provide or perform, in return for payment of money or other valuable consideration, foreclosure-related rescue services.
And “Foreclosure-related rescue services” means any good or service related to, or promising assistance in connection with Stopping, avoiding, or delaying foreclosure proceedings concerning residential real property; or Curing or otherwise addressing a default or failure to timely pay with respect to a residential mortgage loan obligation.
Finally, “Foreclosure-rescue transaction” means a transaction by which residential real property in foreclosure is conveyed to an equity purchaser and the homeowner maintains a legal or equitable interest in the residential real property conveyed, including, without limitation, a lease option interest, an option to acquire the property, an interest as beneficiary or trustee to a land trust, or other interest in the property conveyed.
It is important for realtors, title agents, attorneys and especially homeowners to understand the new law and its broad application to just about any interaction between a homeowner and any party who provides any service to that homeowner. For questions about the law or to determine whether the law applies to your conduct or any other party, you are encouraged to visit the website of the Florida Attorney General here.