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A bill to be entitled

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An act relating to subprime loans; amending s. 494.0078,

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F.S.; revising terminology; amending s. 494.0079, F.S.;

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creating, revising, and deleting definitions; amending s.

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494.00791, F.S.; prohibiting specified terms in subprime

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loan agreements; limiting prepayment penalties; limiting

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balloon payments; requiring consideration of borrower's

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ability to pay; providing factors to be considered;

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providing requirements for variable rate loans; requiring

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a certificate of completion for lender to make payments to

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contractor under a home improvement contract; deleting

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time limitation prohibiting certain refinancing; deleting

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provisions relating to open-ended loans; revising

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provisions relating to modification or deferral fees;

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prohibiting certain mandatory arbitration clauses;

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prohibiting fees for providing certain balance

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information; requiring lenders to provide payoff balances

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within a specified period upon request; prohibiting

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certain lender financing of certain insurance and debt

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cancellation agreements; prohibiting financing of certain

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fees and charges; requiring a lender to disclose to the

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borrower the terms and costs associated with a fixed rate

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loan; prohibiting charging points and fees in certain

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refinancing; amending s. 494.00792, F.S.; revising

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required disclosures to borrowers; providing for a right

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of rescission within a specified period; amending s.

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494.00794, F.S.; revising provisions relating to lender

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notices of default; amending s. 494.00796, F.S.; revising

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provisions relating to corrections and unintentional

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violations; creating s. 494.00798, F.S.; providing

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remedies for violations; providing severability; providing

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an effective date.

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Be It Enacted by the Legislature of the State of Florida:

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     Section 1.  Subsection (2) of section 494.0078, Florida

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Statutes, is amended to read:

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     494.0078  Short title; purposes.--

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     (2)(a)  The Legislature finds that abusive mortgage lending

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has become a problem in this state even though most subprime

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high-cost home loans do not involve abusive mortgage practices.

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One of the most common forms of abusive lending is the making of

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loans that are equity-based rather than income-based. The

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financing of points and fees in these loans provides immediate

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income to the originator and encourages borrowers creditors to

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repeatedly refinance home loans. As long as there is sufficient

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equity in the home, an abusive lender creditor benefits even if

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the borrower is unable to make the payments and is forced to

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refinance. The financing of high points and fees causes the loss

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of equity in each refinancing and often leads to foreclosure.

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     (b)  Abusive lending has threatened the viability of many

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communities and caused decreases in home ownership. While the

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marketplace appears to operate effectively for conventional

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mortgages, too many homeowners find themselves victims of

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overreaching lenders creditors who provide loans with

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unnecessarily high costs and terms that are unnecessary to secure

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repayment of the loan. The Legislature finds that as competition

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and self-regulation have not eliminated the abusive terms from

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home-secured loans, the consumer protection provisions of this

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act are necessary to encourage fair lending.

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     Section 2.  Section 494.0079, Florida Statutes, is amended

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to read:

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     494.0079  Definitions.--As used in this act:

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     (1)  "Affiliate" means any company that controls, is

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controlled by, or is in common control with another company, as

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set forth in 12 U.S.C. ss. 1841 et seq. and the regulations

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adopted thereunder.

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     (2)  "Annual percentage rate" means the annual percentage

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rate for the loan calculated according to the provisions of 15

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U.S.C. s. 1606 and the regulations adopted thereunder by the

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Federal Reserve Board.

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     (3) "Bona fide loan discount points" means loan discount

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points actually paid by the borrower to the lender for the

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purpose of reducing and which, in fact, result in a bona fide

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reduction of the interest rate applicable to the loan by a

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minimum of 25 basis points per discount point.

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     (4)(3) "Borrower" means any natural person obligated to

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repay a loan, including, but not limited to, a coborrower,

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cosignor, or guarantor.

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     (4) "Bridge loan" means a loan with a maturity of less than

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18 months that only requires the payment of interest until such

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time as the entire unpaid balance is due and payable.

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     (5)  "Commission" means the Financial Services Commission.

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     (6) "Fully indexed rate" equals the index rate prevailing

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at the time a residential mortgage loan is originated plus the

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margin that will apply after the expiration of an introductory

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interest rate.

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     (7) "High-cost home loan" means a home loan as defined in

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15 U.S.C. s. 1602(aa) and regulations adopted thereunder.

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     (7) "Home loan" means a loan, including an open-end credit

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plan, other than a reverse mortgage transaction, in which:

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     (a) The debt is incurred primarily for personal, family, or

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household purposes; and

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     (b) The loan is secured by either a security interest on a

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manufactured home or a mortgage deed of trust on real estate in

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this state upon which there is located or there is to be located

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a structure or structures:

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     1. Designed principally for occupancy by one to four

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families; and

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     2. That is or will be occupied by a borrower as the

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borrower's principal dwelling.

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     (8) "Lender" means any person who makes a subprime high-

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cost home loan or acts as a mortgage broker or lender, finance

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company, or retail installment seller with respect to a subprime

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high-cost home loan, but shall not include any entity chartered

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by the United States Congress when engaging in secondary market

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mortgage transactions as an assignee or otherwise.

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     (9)(6) "Office" means the Office of Financial Regulation of

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the commission.

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     (10) "Open-end credit plan" means credit extended by a

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lender under a plan in which the lender reasonably contemplates

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repeated transactions, may charge interest or otherwise impose a

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finance charge from time to time on an outstanding unpaid

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balance, and the amount of credit that may be extended to the

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obligor during the term of the plan, up to any credit limit set

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by the lender, is generally made available to the extent that any

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outstanding balance is repaid.

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     (11) "Points and fees" means:

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     (a) All items required to be disclosed under 12 C.F.R. s.

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226.4(a) and (b), as amended, except interest or the time-price

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differential.

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     (b) All charges for items listed under 12 C.F.R. s.

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226.4(c)(7), as amended, but only if the lender receives direct

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or indirect compensation in connection with the charge or the

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charge is paid to an affiliate of the lender; otherwise, the

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charges are not included within the meaning of the term "points

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and fees."

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     (c) All compensation paid directly or indirectly to a

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mortgage broker, including a broker that originates a loan in its

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own name in a table-funded transaction. A bona fide sale of a

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loan in the secondary mortgage market shall not be considered a

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table-funded transaction, and a table-funded transaction shall

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not be considered a secondary market transaction.

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     (d) The cost of all premiums financed by the lender,

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directly or indirectly for any credit life, credit disability,

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credit unemployment, or credit property insurance, or any other

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life or health insurance, or any payments financed by the lender

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directly or indirectly for any debt cancellation or suspension

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agreement or contract, except that insurance premiums calculated

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and paid on a monthly basis shall not be considered financed by

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the lender.

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     (e) The maximum prepayment fees and penalties that may be

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charged or collected under the terms of the loan documents.

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     (f) For open-end loans, the term includes those points and

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fees described in paragraphs (a), (b), and (c) that are charged

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at loan closing, plus the minimum additional fees the borrower

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would be required to pay to draw down an amount equal to the

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total amount, and the maximum prepayment fees and penalties that

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may be charged or collected under the terms of the loan

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documents.

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     (12) "Subprime loan" means:

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     (a) For an adjustable rate loan secured by a first lien on

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a dwelling that can increase in interest rate but not decrease in

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interest rate below the fully indexed rate at the time of

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origination, a loan for which the annual percentage rate (APR) is

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greater than 3 percentage points above the weekly average yield

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on United States Treasury securities having comparable periods of

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maturity as of the 15th day of the month immediately preceding

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the loan closing.

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     (b) For all other loans secured by a first lien on a

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dwelling, a loan for which the APR is greater than 5 percentage

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points above the weekly average yield on United States Treasury

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securities having comparable periods of maturity as of the 15th

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day of the month immediately preceding the loan closing.

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     (c) For loans secured by a subordinate lien on a dwelling

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or a mortgage secured solely by a security interest in a

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manufactured home, a loan for which the APR is greater than 7

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percentage points above the weekly average yield on United States

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Treasury securities having comparable periods of maturity as of

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the 15th day of the month immediately preceding the loan closing.

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     (d)1. For all loans in which the total loan amount is

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$30,000 or more, the total points and fees on the loan, excluding

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up to two bona fide discount points, paid by the borrower at or

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before the closing, exceed three 3 percent of the total loan

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amount; or

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     2. For all loans in which the total loan amount is less

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than $30,000, the total points and fees on the loan, excluding up

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to two bona fide discount points, paid by the borrower at or

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before closing, exceed the lesser of $900 or 6 percent of the

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total loan amount.

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     (13) "Table-funded transaction" means a loan transaction

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closed by a mortgage broker in the mortgage broker's own name

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with funds advanced by a person other than the mortgage broker in

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which the loan is assigned contemporaneously or within one

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business day of the funding of the loan to the person that

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advanced the funds.

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     Section 3.  Section 494.00791, Florida Statutes, is amended

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to read:

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     494.00791  Prohibited acts.--

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     (1)  PREPAYMENT PENALTIES.--

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     (a) A subprime high-cost home loan may not contain terms

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that require a borrower to pay a prepayment penalty for paying

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all or part of the loan principal before the date on which the

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payment is due.

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     (b) Notwithstanding paragraph (a), a lender making a high-

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cost home loan may include in the loan contract a prepayment fee

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or penalty, for up to the first 36 months after the date of

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consummation of the loan, if:

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     1. The borrower has also been offered a choice of another

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product without a prepayment penalty.

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     2. The borrower has been given, at least 3 business days

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prior to the loan consummation, a written disclosure of the terms

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of the prepayment fee or penalty by the lender, including the

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benefit the borrower will receive for accepting the prepayment

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fee or penalty through either a reduced interest rate on the loan

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or reduced points or fees.

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     (2) DEFAULT INTEREST RATE.--A subprime high-cost home loan

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may not provide for a higher interest rate after default on the

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loan. However, this prohibition does not apply to interest rate

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changes in a variable rate loan otherwise consistent with the

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provisions of the loan documents, provided the change in interest

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rate is not triggered by a default or the acceleration of the

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interest rate.

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     (3) BALLOON PAYMENTS.--No subprime home loan may contain a

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scheduled payment that is more than twice as large as the average

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of earlier scheduled payments. This subsection does not apply

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when the payment schedule is adjusted to the seasonal or

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irregular income of the borrower A high-cost home loan having a

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term of less than 10 years may not contain terms under which the

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aggregate amount of the regular periodic payments would not fully

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amortize the outstanding principal balance. However, this

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prohibition does not apply when the payment schedule is adjusted

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to account for the seasonal or irregular income of the borrower

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or if the loan is a bridge loan.

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     (4) NEGATIVE AMORTIZATION.--A subprime high-cost home loan

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may not contain terms under which the outstanding principal

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balance will increase at any time over the course of the loan

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because the regular periodic payments do not cover the full

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amount of the interest due.

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     (5) PREPAID PAYMENTS.--A subprime high-cost home loan may

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not include terms under which more than two periodic payments

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required under the loan are consolidated and paid in advance from

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the loan proceeds provided to the borrower.

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     (6)  EXTENDING CREDIT WITHOUT REGARD TO THE PAYMENT ABILITY

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OF THE BORROWER.--

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     (a) A lender may not make a subprime home loan unless the

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lender verifies the borrower's reasonable ability to pay the

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scheduled payments of the following, as applicable:

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     1. Principal.

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     2. Interest.

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     3. Real estate taxes.

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     4. Homeowner's insurance.

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     5. Assessments.

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     6. Mortgage insurance premiums.

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     (b) For loans in which the interest rate may vary, the

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reasonable ability to pay must be determined based on a fully

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indexed rate and repayment schedule that achieves full

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amortization over the life of the loan. For all home loans, the

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borrower's income and financial resources must be verified by tax

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returns, payroll receipts, bank records, or other similarly

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reliable documents. Nothing in this subsection limits a lender's

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ability to rely on criteria other than the borrower's income and

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financial resources to establish the borrower's reasonable

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ability to repay the residential mortgage loan, provided that the

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other criteria are verified through reasonably reliable methods

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and documentation. A statement by the borrower to the lender of

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the borrower's income and resources is not sufficient to

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establish the existence of the income or resources when verifying

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the reasonable ability to pay. A lender making a high-cost home

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loan shall not engage in any pattern or practice of extending

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high-cost home loans to borrowers based upon the borrowers'

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collateral without regard to the borrowers' ability to repay the

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loan, including the borrowers' current and expected income,

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current obligations, and employment.

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     (7)  PAYMENTS TO A HOME CONTRACTOR.--A lender shall not make

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any payments to a contractor under a home improvement contract

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from amounts of a subprime high-cost home loan unless the lender

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is presented with a signed and dated completion certificate

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showing that the home improvements have been completed and other

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than:

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     (a) In The form of an instrument that is payable to the

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borrower or jointly to the borrower and the contractor; or

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     (b) At the election of the borrower, through by a third-

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party escrow agent in accordance with terms established in a

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written agreement signed by the borrower, the lender, and the

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contractor prior to the date of payment.

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     (8) DUE-ON-DEMAND CLAUSE.--A subprime high-cost home loan

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may not contain a provision that permits the lender, in its sole

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discretion, to call or accelerate the indebtedness. This

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subsection provision does not prohibit acceleration of the loan

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due to the borrower's failure to abide by the terms of the loan,

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or due to fraud or material misrepresentation by the consumer in

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connection with the loan.

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     (9) FLIPPING REFINANCING WITHIN AN 18-MONTH PERIOD.--

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     (a)  A lender, its affiliate, or an assignee shall not

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refinance any subprime high-cost home loan to the same borrower

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within the first 18 months of the loan when the refinancing does

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not have a reasonable benefit to the borrower considering all of

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the circumstances, including, but not limited to, the terms of

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both the new and refinanced loans, the cost of the new loan, and

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the borrower's circumstances.

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     (b)  A lender or assignee shall not engage in acts or

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practices to evade this requirement, including a pattern or

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practice of arranging for the refinancing of the lender's or

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assignee's own loans by affiliated or unaffiliated lenders or

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modifying a loan agreement, whether or not the existing loan is

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satisfied and replaced by the new loan, and charging a fee.

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     (10) OPEN-ENDED LOANS.--A lender shall not make any loan as

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an open-ended loan in order to evade the provisions of this act

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unless such open-ended loans meet the definition in 12 C.F.R. s.

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226.2(a)(20).

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     (10)(11) RECOMMENDATION OF DEFAULT.--A lender shall not

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recommend or encourage default on an existing loan or other debt

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prior to and in connection with the closing or planned closing of

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a subprime high-cost home loan that refinances all or any portion

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of such existing loan or debt.

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     (11)(12) PROHIBITED DOOR-TO-DOOR LOANS.--A subprime high-

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cost home loan may not be made as a direct result of a potential

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or future lender or its representative offering or selling a

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subprime high-cost home loan at the residence of a potential

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borrower without a prearranged appointment with the potential

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borrower or the expressed invitation of the potential borrower.

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This subsection does not apply to mail solicitations that may be

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received by the potential borrower.

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     (12)(13) LATE PAYMENT FEES.--A lender may not charge a late

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payment fee for a subprime high-cost home loan except as provided

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in this subsection:

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     (a)  A late payment fee may not be in excess of 5 percent of

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the amount of the payment past due.

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     (b)  A late payment fee may only be assessed for a payment

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past due for 15 days or more.

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     (c)  A late payment fee may not be charged more than once

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with respect to a single late payment. If a late payment fee is

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deducted from a payment made on the loan and such deduction

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causes a subsequent default on a subsequent payment, no late

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payment fee may be imposed for such default. If a late payment

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fee has been imposed once with respect to a particular late

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payment, no such fee shall be imposed with respect to any future

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payment which would have been timely and sufficient, but for the

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previous default.

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     (13)(14) MODIFICATION OR DEFERRAL FEES.--A lender may not

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charge a borrower any fees or other charges to modify, renew,

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extend, or amend a subprime high-cost home loan or to defer any

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payment due under the terms of a subprime high-cost home loan on

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a minimum of one modification, renewal, extension, or deferral

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per each 12 months of the length of the loan.

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     (14) MANDATORY ARBITRATION CLAUSE.--No subprime home loan

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may be subject to a mandatory arbitration clause that limits in

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any way the right of the borrower to seek relief through the

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judicial process for any and all claims and defenses the borrower

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may have against the lender, broker, or other party involved in

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the loan transaction.

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     (15) BALANCES; FEES; TIME.--No lender may charge a fee for

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informing or transmitting to any person the balance due to pay

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off a home loan or to provide a release upon prepayment. Payoff

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balances shall be provided within a reasonable time, but in any

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event no more than 7 business days after the request.

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     (16) INSURANCE AND DEBT CANCELLATION AGREEMENTS.--No lender

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making a subprime home loan shall finance, directly or

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indirectly, any credit life, credit disability, credit

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unemployment, or credit property insurance, or any other life or

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health insurance, or any payments directly or indirectly for any

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debt cancellation or suspension agreement or contract, except

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that insurance premiums or debt cancellation or suspension fees

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calculated and paid on a monthly basis shall not be considered

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financed by the lender.

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     (17) FINANCING FEES AND CHARGES.--In making a subprime home

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loan, a lender may not directly or indirectly finance:

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     (a) Any points and fees; or

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     (b) Any other charges payable to third parties.

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     (18) NOTICE OF FIXED RATE LOAN.--Before the closing, a

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lender must disclose to the borrower the terms and costs

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associated with a fixed rate loan from the same lender at the

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lowest annual percentage rate for which the borrower qualifies.

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     (19) NO BENEFIT FROM REFINANCING EXISTING SUBPRIME HOME

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LOAN WITH A NEW SUBPRIME HOME LOAN.--A lender may not charge a

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borrower points and fees in connection with a subprime home loan

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if the proceeds of the subprime home loan are used to refinance

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an existing subprime home loan held by the same lender as note

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holder.

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     Section 4.  Section 494.00792, Florida Statutes, is amended

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to read:

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     494.00792 Required disclosures for subprime high-cost home

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loans.--

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     (1)  In addition to other disclosures required by law and in

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conspicuous type:

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     (a) Notice to borrower.--A lender making a subprime high-

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cost home loan shall provide the following written a notice in at

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least 12-point boldfaced type to a borrower acknowledged in

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writing and signed by the borrower, not later than the time the

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notice provided in 12 C.F.R. s. 226.31(c) is required in

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substantially the following form:

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NOTICE TO BORROWER

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     If you accept obtain this subprime high-cost home loan, the

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lender will have a mortgage on your home. You could lose your

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home and any money you have put into it if you do not meet your

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obligations under the loan. You should be aware that you might be

390

able to obtain a loan at a lower cost.

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     Mortgage loan rates and closing costs and fees vary based on

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many factors, including your particular credit and financial

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circumstances, your employment history, the loan-to-value

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requested, and the type of property that will secure your loan.

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The loan rate and fees could also vary based upon which lender or

396

broker you select. As a borrower, you should shop around and

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compare loan rates and fees.

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     You should also consider consulting a qualified independent

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credit counselor or other experienced financial adviser regarding

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the rates, fees, and provisions of this mortgage loan before you

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proceed. You should contact the United States Department of

402

Housing and Urban Development for a list of credit counselors

403

available in your area.

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     You are not required to complete this agreement merely

405

because you have received these disclosures or have signed a loan

406

application.

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     Borrowing for the purpose of debt consolidation can be an

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appropriate financial management tool. However, if you continue

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to incur significant new credit card charges or other debts after

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this subprime high-cost home loan is closed and then experience

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financial difficulties, you could lose your home and any equity

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you have in it if you do not meet your mortgage loan obligations.

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     Remember that property taxes and homeowners' insurance are

414

your responsibility. Not all lenders provide escrow services for

415

these payments. You should ask your lender about these services.

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     Also, your payments on existing debts contribute to your

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credit rating. You should not accept any advice to ignore your

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regular payments to your existing creditors.

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     (b) Annual percentage rate.--A lender making a subprime

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high-cost home loan shall disclose:

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     1.  In the case of a fixed mortgage, the annual percentage

422

rate and the amount of the regular monthly payment.

423

     2.  In the case of any other credit transaction, the annual

424

percentage rate, the amount of the regular monthly payment and

425

the amount of any balloon payment permitted under this section, a

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statement that the interest rate and monthly payment may

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increase, and the amount of the maximum monthly payment based

428

upon the maximum interest rate allowed pursuant to law.

429

     (c) Notice to purchasers and assignees.--All subprime high-

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cost home loans shall contain the following notice:

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     Notice: This is a mortgage subject to the provisions of the

432

Florida Fair Lending Act. Purchasers and assignees of this

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mortgage could be liable for all claims and defenses with respect

434

to the mortgage which the borrower could assert against the

435

lender creditor.

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     (2)  TIMING OF DISCLOSURE.--

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     (a)  The disclosure required by this subsection shall be

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given not less than 3 business days prior to the consummation of

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the subprime high-cost home loan.

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     (b)  New disclosures are required when, after disclosure is

441

made, the lender making the subprime high-cost home loan changes

442

the terms of the extension of credit, including if such changes

443

make the original disclosures inaccurate, unless new disclosures

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are provided that meet the requirements of this section.

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     (c) In addition to any other right to rescission, the

446

borrower has the right to rescind the subprime home loan until

447

midnight of the 3rd business day after consummation, delivery of

448

the rescission notice, or delivery of all material disclosures,

449

whichever occurs last. The lender shall provide appropriate forms

450

for the borrower to exercise his or her right to rescission using

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the notice and forms required by 15 U.S.C. s. 1635(a) and

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implementing regulations.

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     (c) A lender may provide new disclosures pursuant to

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paragraph (b) by telephone, if:

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     1. The change is initiated by the borrower.

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     2. At the consummation of the high-cost home loan:

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     a. The lender provides the disclosures in writing to the

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borrower.

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     b. The lender and the borrower certify in writing that the

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new disclosures were provided by telephone no later than 3 days

461

prior to the consummation of the high-cost home loan.

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     (d) A creditor must disclose to any high-cost home loan

463

borrower the rights of the borrower to rescind the high-cost home

464

loan within 3 business days pursuant to 15 U.S.C. s. 1635(a) and

465

shall provide appropriate forms for the borrower to exercise his

466

or her right to rescission. The notice, forms, and provisions

467

thereof must be in accordance with the requirements of 15 U.S.C.

468

s. 1635(a).

469

     Section 5.  Subsection (1), paragraphs (c) and (d) of

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subsection (2), and subsection (3) of section 494.00794, Florida

471

Statutes, are amended to read:

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     494.00794 Right to cure subprime high-cost home loans.--

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     (1) RIGHT TO REINSTATE.--For a subprime high-cost home

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loan, if a lender asserts that grounds for acceleration exist and

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requires the payment in full of all sums secured by the security

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instrument, the borrower, or anyone authorized to act on the

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borrower's behalf, shall have the right, during the 45-day period

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set forth in subsection (2), to cure the default and reinstate

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the home loan by tendering the amount or performance as specified

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in this section. However, once a lender has provided two such

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notices as required by this section, for two separate incidents,

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a lender is not thereafter required to provide the notice

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required by this section, and the borrower is not entitled by

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this section to cure the default, for a third or subsequent

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incident for which the lender asserts that grounds exist for

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acceleration of the loan and repayment in full. Cure of default

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as provided in this section shall reinstate the borrower to the

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same position as if the default had not occurred and shall

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nullify, as of the date of the cure, any acceleration of any

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obligation under the security instrument or note arising from the

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default.

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     (2)  GROUNDS FOR REINSTATEMENT.--Before any action filed to

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foreclose upon the home or other action is taken to seize or

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transfer ownership of the home, a notice of the right to cure the

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default must be delivered to the borrower at the address of the

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property upon which any security exists for the home loan by

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postage prepaid certified United States mail, return receipt

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requested, which notice is effective upon deposit in the United

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States mail, and shall inform the borrower:

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     (c)  That if the borrower does not cure the default by the

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date specified, the lender creditor may take steps to terminate

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the borrower's ownership of the property by requiring payment in

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full of the home loan and commencing a foreclosure proceeding or

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other action to seize the home.

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     (d) Of the name and address of the lender creditor and the

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telephone number of a representative of the lender creditor whom

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the borrower may contact if the borrower disagrees with the

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lender's creditor's assertion that a default has occurred or the

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correctness of the lender's creditor's calculation of the amount

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required to cure the default.

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     (3)  FEES.--To cure a default under this section, a borrower

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shall not be required to pay any charge, fee, or penalty

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attributable to the exercise of the right to cure a default as

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provided for in this section, other than the fees specifically

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allowed by this act. The borrower shall not be liable for any

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attorney's fees or costs relating to the borrower's default that

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are incurred by the lender creditor prior to or during the 45-day

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period set forth in paragraph (2)(b).

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     Section 6.  Section 494.00796, Florida Statutes, is amended

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to read:

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     494.00796 Corrections and unintentional violations

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Enforcement.--

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     (1) Any person or the agent, officer, or other

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representative of any person committing a material violation of

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the provisions of this act shall forfeit the entire interest

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charged in the high-cost home loan or contracted to be charged or

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received, and only the principal sum of such high-cost home loan

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can be enforced in any court in this state, either at law or in

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equity.

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     (2) A lender creditor in a subprime home loan who, when

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acting in good faith, fails to comply with the provisions of this

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act shall not be deemed to have violated this act if the lender

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creditor establishes that:

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     (1) Within 30 days after the loan closing, and prior to

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receiving any notice from the borrower of the compliance failure,

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the lender has made appropriate restitution to the borrower, and

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appropriate adjustments are made to the loan; or

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     (2) Within 60 days after the loan closing and prior to

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receiving any notice from the borrower of the compliance failure,

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and the compliance failure was not intentional and resulted from

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a bona fide error notwithstanding the maintenance of procedures

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reasonably adapted to avoid such errors, the borrower is notified

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of the compliance failure, appropriate restitution is made to the

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borrower, and appropriate adjustments are made to the loan.

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within 60 days after receiving any notice from the borrower of

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the compliance failure, which compliance failure was not

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intentional and resulted from a bona fide error notwithstanding

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the maintenance of procedures reasonably adapted to avoid such

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errors, the borrower has been notified of the compliance failure,

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appropriate restitution has been made to the borrower, and

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appropriate adjustments are made to the loan. Bona fide errors

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shall include, but not be limited to, clerical, calculation,

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computer malfunction and programming, and printing errors. An

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error of legal judgment with respect to a person's obligations

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under this section is not a bona fide error.

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     (3) The remedies provided in this section are cumulative.

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     Section 7.  Section 494.00789, Florida Statutes, is created

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to read:

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     494.00789 Remedies.--Any violation of this act constitutes

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a violation of the Florida Deceptive and Unfair Trade Practices

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Act. All remedies under that act are available for an action

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under that act.

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     Section 8. If any provision of this act or its application

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to any person or circumstance is held invalid, the invalidity

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does not affect other provisions or applications of the act which

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can be given effect without the invalid provision or application,

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and to this end the provisions of this act are severable.

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     Section 9.  This act shall take effect October 1, 2008.