Foreclosure Rescue Fraud Legislation Into Law

Senator Fasano Announces that Governor Crist Has Signed Foreclosure Rescue Fraud Legislation Into Law

Senator Mike Fasano announces that Governor Crist signed HB 643/ SB 992 into law today which places into statute many protections for individuals facing foreclosure.  The legislation was a top priority of both Senator Fasano and Attorney General Bill McCollum.

In 2007 alone there were over 245,000 mortgage foreclosures in Florida.  Additionally, Florida ranks second in the Nation only to California in the number of foreclosures in 2007.

A common practice of scam artists who pray on those facing foreclosure target homeowners trying to avoid closure by presenting themselves as foreclosure rescue counselors.  The schemes perpetrated by these individuals include charging high fees for work the homeowner could do themselves; and a false bailout (where the homeowner is lead to believe that they can sell their home, rent it short-term and eventually repurchase the home).

The legislation protects consumers by informing them of their rights when they are entering into a contract with a foreclosure rescue entity and by including further protections for those who face foreclosure.  It requires that foreclosure rescuers include in large bold font notification to homeowners of this right of cancellation on the contract and a recommendation that the homeowner contact the lender or mortgage holder prior to the signing of the agreement.  It further informs the homeowner the consultant is prohibited from accepting any form of payment until all services are completed.   Most importantly the bill creates a three-day right of cancellation for homeowners who sign a contract for foreclosure rescue services.

“The threat and fear of losing one’s home has driven many people to unknowingly seek the services of unscrupulous foreclosure consultants,” Senator Fasano states.  “Passage of this legislation will ensure that those who decide to seek the help of a professional are given as many protections as the law will now allow to ensure that their rights as a homeowner are not infringed upon.”

“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 bill becomes effective on October 1, 2008.

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