HB 979

1	A bill to be entitled
2	An act relating to subprime loans; amending s. 494.0078,
3	F.S.; revising terminology; amending s. 494.0079, F.S.;
4	creating, revising, and deleting definitions; amending s.
5	494.00791, F.S.; prohibiting specified terms in subprime
6	loan agreements; limiting prepayment penalties; limiting
7	balloon payments; requiring consideration of borrower's
8	ability to pay; providing factors to be considered;
9	providing requirements for variable rate loans; deleting
10	time limitation prohibiting certain refinancing; deleting
11	provisions relating to open-ended loans; revising
12	provisions relating to modification or deferral fees;
13	prohibiting certain mandatory arbitration clauses;
14	prohibiting fees for providing certain balance
15	information; requiring lenders to provide payoff balances
16	within a specified period upon request; prohibiting
17	certain lender financing of certain insurance and debt
18	cancellation agreements; prohibiting financing of certain
19	fees and charges; prohibiting charging points and fees in
20	certain refinancing; requiring certain disclosures before
21	closing an adjustable rate loan concerning the fixed rate
22	loans available to the borrower; amending s. 494.00792,
23	F.S.; revising required disclosures to borrowers;
24	providing for a right of rescission within a specified
25	period; amending s. 494.00793, F.S.; revising provisions
26	relating to applicability of remedies; amending s.
27	494.00794, F.S.; revising provisions relating to lender
28	notices of default; amending s. 494.00796, F.S.; revising
29	provisions relating to corrections and unintentional
30	violations; creating s. 494.00798, F.S.; providing for
31	civil remedies for violations; creating s. 494.00799,
32	F.S.; prohibiting intentional violations of specified
33	provisions; providing penalties; providing severability;
34	providing an effective date.
35
36	Be It Enacted by the Legislature of the State of Florida:
37
38	Section 1.  Subsection (2) of section 494.0078, Florida
39	Statutes, is amended to read:
40	494.0078  Short title; purposes.--
41	(2)(a)  The Legislature finds that abusive mortgage lending
42	has become a problem in this state even though most subprime
43	high-cost home loans do not involve abusive mortgage practices.
44	One of the most common forms of abusive lending is the making of
45	loans that are equity-based rather than income-based. The
46	financing of points and fees in these loans provides immediate
47	income to the originator and encourages borrowers creditors to
48	repeatedly refinance home loans. As long as there is sufficient
49	equity in the home, an abusive lender creditor benefits even if
50	the borrower is unable to make the payments and is forced to
51	refinance. The financing of high points and fees causes the loss
52	of equity in each refinancing and often leads to foreclosure.
53	(b)  Abusive lending has threatened the viability of many
54	communities and caused decreases in home ownership. While the
55	marketplace appears to operate effectively for conventional
56	mortgages, too many homeowners find themselves victims of
57	overreaching lenders creditors who provide loans with
58	unnecessarily high costs and terms that are unnecessary to
59	secure repayment of the loan. The Legislature finds that as
60	competition and self-regulation have not eliminated the abusive
61	terms from home-secured loans, the consumer protection
62	provisions of this act are necessary to encourage fair lending.
63	Section 2.  Section 494.0079, Florida Statutes, is amended
64	to read:
65	494.0079  Definitions.--As used in this act:
66	(1)  "Affiliate" means any company that controls, is
67	controlled by, or is in common control with another company, as
68	set forth in 12 U.S.C. ss. 1841 et seq. and the regulations
69	adopted thereunder.
70	(2)  "Annual percentage rate" means the annual percentage
71	rate for the loan calculated according to the provisions of 15
72	U.S.C. s. 1606 and the regulations adopted thereunder by the
73	Federal Reserve Board.
74	(3)  "Bona fide loan discount points" means loan discount
75	points actually paid by the borrower to the lender for the
76	purpose of reducing and which, in fact, result in a bona fide
77	reduction of the interest rate applicable to the loan by a
78	minimum of 25 basis points per discount point.
79	(4)(3)  "Borrower" means any natural person obligated to
80	repay a loan, including, but not limited to, a coborrower,
81	cosignor, or guarantor.
82	(4)  "Bridge loan" means a loan with a maturity of less
83	than 18 months that only requires the payment of interest until
84	such time as the entire unpaid balance is due and payable.
85	(5)  "Commission" means the Financial Services Commission.
86	(6)  "Fully indexed rate" equals the index rate prevailing
87	at the time a residential mortgage loan is originated plus the
88	margin that will apply after the expiration of an introductory
89	interest rate.
90	(7)  "High-cost home loan" means a home loan as defined in
91	15 U.S.C. s. 1602(aa) and regulations adopted thereunder.
92	(7)  "Home loan" means a loan, including an open-end credit
93	plan, other than a reverse mortgage transaction, in which:
94	(a)  The debt is incurred primarily for personal, family,
95	or household purposes; and
96	(b)  The loan is secured by either a security interest on a
97	manufactured home or a mortgage deed of trust on real estate in
98	this state upon which there is located or there is to be located
99	a structure or structures:
100	1.  Designed principally for occupancy by one to four
101	families; and
102	2.  That is or will be occupied by a borrower as the
103	borrower's principal dwelling.
104	(8)  "Lender" means any person who makes a subprime high-
105	cost home loan or acts as a mortgage broker or lender, finance
106	company, or retail installment seller with respect to a subprime
107	high-cost home loan, but shall not include any entity chartered
108	by the United States Congress when engaging in secondary market
109	mortgage transactions as an assignee or otherwise.
110	(9)(6)  "Office" means the Office of Financial Regulation
111	of the commission.
112	(10)  "Open-end credit plan" means credit extended by a
113	lender under a plan in which:
114	(a)  The lender reasonably contemplates repeated
115	transactions;
116	(b)  The lender may charge interest or otherwise impose a
117	finance charge from time to time on an outstanding unpaid
118	balance; and
119	(c)  The amount of credit that may be extended to the
120	obligor during the term of the plan, up to any credit limit set
121	by the lender, is generally made available to the extent that
122	any outstanding balance is repaid.
123	(11)  "Points and fees" means:
124	(a)  All items required to be disclosed under 12 C.F.R. ss.
125	226.4(a) and (b), as amended, except interest or the time-price
126	differential.
127	(b)  All charges for items listed under 12 C.F.R. s.
128	226.4(c)(7), as amended, but only if the lender receives direct
129	or indirect compensation in connection with the charge or the
130	charge is paid to an affiliate of the lender; otherwise, the
131	charges are not included within the meaning of the term "points
132	and fees."
133	(c)  All compensation paid directly or indirectly to a
134	mortgage broker, including a broker that originates a loan in
135	its own name in a table-funded transaction. A bona fide sale of
136	a loan in the secondary mortgage market shall not be considered
137	a table-funded transaction, and a table-funded transaction shall
138	not be considered a secondary market transaction.
139	(d)  The maximum prepayment fees and penalties that may be
140	charged or collected under the terms of the loan documents.
141	(e)  For open-end credit plans, the term includes those
142	points and fees described in paragraphs (a), (b), and (c) that
143	are charged at loan closing, plus the minimum additional fees
144	the borrower would be required to pay to draw down an amount
145	equal to the total amount, and the maximum prepayment fees and
146	penalties that may be charged or collected under the terms of
147	the loan documents.
148	(12)  "Subprime loan" means:
149	(a)  For an adjustable rate loan secured by a first lien on
150	a dwelling that can increase in interest rate but not decrease
151	in interest rate below the fully indexed rate at the time of
152	origination, a loan for which the annual percentage rate (APR)
153	is greater than 2 percentage points above the weekly average
154	yield on 5-year United States Treasury securities as of the 15th
155	day of the month immediately preceding the loan closing.
156	(b)  For all other loans secured by a first lien on a
157	dwelling, a loan for which the APR is greater than 3 percentage
158	points above the weekly average yield on 5-year United States
159	Treasury securities as of the 15th day of the month immediately
160	preceding the loan closing.
161	(c)  For loans secured by a subordinate lien on a dwelling
162	or a mortgage secured solely by a security interest in a
163	manufactured home, a loan for which the APR is greater than 5
164	percentage points above the weekly average yield on 5-year
165	United States Treasury securities as of the 15th day of the
166	month immediately preceding the loan closing.
167	(d)  For all loans in which the total loan amount is
168	$30,000 or more, the total points and fees on the loan,
169	excluding up to 2 bona fide discount points, paid by the
170	borrower at or before the closing exceed 3 percent of the total
171	loan amount; and for all loans in which the total loan amount is
172	less than $30,000, the total points and fees on the loan,
173	excluding up to 2 bona fide discount points, paid by the
174	borrower at or before closing exceed the lesser of $900 or 6
175	percent of the total loan amount.
176	(13)  "Table-funded transaction" means a loan transaction
177	closed by a mortgage broker in the mortgage broker's own name
178	with funds advanced by a person other than the mortgage broker
179	in which the loan is assigned contemporaneously or within one
180	business day of the funding of the loan to the person that
181	advanced the funds.
182	Section 3.  Section 494.00791, Florida Statutes, is amended
183	to read:
184	494.00791  Prohibited acts.--
185	(1)  PREPAYMENT PENALTIES.--
186	(a)  A subprime high-cost home loan may not contain terms
187	that require a borrower to pay a prepayment penalty for paying
188	all or part of the loan principal before the date on which the
189	payment is due.
190	(b)  Notwithstanding paragraph (a), a lender making a high-
191	cost home loan may include in the loan contract a prepayment fee
192	or penalty, for up to the first 36 months after the date of
193	consummation of the loan, if:
194	1.  The borrower has also been offered a choice of another
195	product without a prepayment penalty.
196	2.  The borrower has been given, at least 3 business days
197	prior to the loan consummation, a written disclosure of the
198	terms of the prepayment fee or penalty by the lender, including
199	the benefit the borrower will receive for accepting the
200	prepayment fee or penalty through either a reduced interest rate
201	on the loan or reduced points or fees.
202	(2)  DEFAULT INTEREST RATE.--A subprime high-cost home loan
203	may not provide for a higher interest rate after default on the
204	loan. However, this prohibition does not apply to interest rate
205	changes in a variable rate loan otherwise consistent with the
206	provisions of the loan documents, provided the change in
207	interest rate is not triggered by a default or the acceleration
208	of the interest rate.
209	(3)  BALLOON PAYMENTS.--No subprime home loan may contain a
210	scheduled payment that is more than twice as large as the
211	average of earlier scheduled payments. This subsection does not
212	apply when the payment schedule is adjusted to the seasonal or
213	irregular income of the borrower A high-cost home loan having a
214	term of less than 10 years may not contain terms under which the
215	aggregate amount of the regular periodic payments would not
216	fully amortize the outstanding principal balance. However, this
217	prohibition does not apply when the payment schedule is adjusted
218	to account for the seasonal or irregular income of the borrower
219	or if the loan is a bridge loan.
220	(4)  NEGATIVE AMORTIZATION.--A subprime high-cost home loan
221	may not contain terms under which the outstanding principal
222	balance will increase at any time over the course of the loan
223	because the regular periodic payments do not cover the full
224	amount of the interest due.
225	(5)  PREPAID PAYMENTS.--A subprime high-cost home loan may
226	not include terms under which more than two periodic payments
227	required under the loan are consolidated and paid in advance
228	from the loan proceeds provided to the borrower.
229	(6)  EXTENDING CREDIT WITHOUT REGARD TO THE PAYMENT ABILITY
230	OF THE BORROWER.--
231	(a)  A lender may not make a subprime home loan unless the
232	lender verifies the borrower's reasonable ability to pay the
233	scheduled payments of the following, as applicable:
234	1.  Principal.
235	2.  Interest.
236	3.  Real estate taxes.
237	4.  Homeowner's insurance.
238	5.  Assessments.
239	6.  Mortgage insurance premiums.
240	(b)  For loans in which the interest rate may vary, the
241	reasonable ability to pay must be determined based on a fully
242	indexed rate and repayment schedule that achieves full
243	amortization over the life of the loan. For all home loans, the
244	borrower's income and financial resources must be verified by
245	tax returns, payroll receipts, bank records, or other similarly
246	reliable documents. Nothing in this subsection limits a lender's
247	ability to rely on criteria other than the borrower's income and
248	financial resources to establish the borrower's reasonable
249	ability to repay the residential mortgage loan, provided that
250	the other criteria are verified through reasonably reliable
251	methods and documentation. A statement by the borrower to the
252	lender of the borrower's income and resources is not sufficient
253	to establish the existence of the income or resources when
254	verifying the reasonable ability to pay. A lender making a high-
255	cost home loan shall not engage in any pattern or practice of
256	extending high-cost home loans to borrowers based upon the
257	borrowers' collateral without regard to the borrowers' ability
258	to repay the loan, including the borrowers' current and expected
259	income, current obligations, and employment.
260	(7)  PAYMENTS TO A HOME CONTRACTOR.--A lender shall not
261	make any payments to a contractor under a home improvement
262	contract from amounts of a subprime high-cost home loan other
263	than:
264	(a)  In The form of an instrument that is payable to the
265	borrower or jointly to the borrower and the contractor; or
266	(b)  At the election of the borrower, through by a third-
267	party escrow agent in accordance with terms established in a
268	written agreement signed by the borrower, the lender, and the
269	contractor prior to the date of payment.
270	(8)  DUE-ON-DEMAND CLAUSE.--A subprime high-cost home loan
271	may not contain a provision that permits the lender, in its sole
272	discretion, to call or accelerate the indebtedness. This
273	subsection provision does not prohibit acceleration of the loan
274	due to the borrower's failure to abide by the terms of the loan,
275	or due to fraud or material misrepresentation by the consumer in
276	connection with the loan.
277	(9)  FLIPPING REFINANCING WITHIN AN 18-MONTH PERIOD.--
278	(a)  A lender, its affiliate, or an assignee shall not
279	refinance any subprime high-cost home loan to the same borrower
280	within the first 18 months of the loan when the refinancing does
281	not have a reasonable benefit to the borrower considering all of
282	the circumstances, including, but not limited to, the terms of
283	both the new and refinanced loans, the cost of the new loan, and
284	the borrower's circumstances.
285	(b)  A lender or assignee shall not engage in acts or
286	practices to evade this requirement, including a pattern or
287	practice of arranging for the refinancing of the lender's or
288	assignee's own loans by affiliated or unaffiliated lenders or
289	modifying a loan agreement, whether or not the existing loan is
290	satisfied and replaced by the new loan, and charging a fee.
291	(10)  OPEN-ENDED LOANS.--A lender shall not make any loan
292	as an open-ended loan in order to evade the provisions of this
293	act unless such open-ended loans meet the definition in 12
294	C.F.R. s. 226.2(a)(20).
295	(10)(11)  RECOMMENDATION OF DEFAULT.--A lender shall not
296	recommend or encourage default on an existing loan or other debt
297	prior to and in connection with the closing or planned closing
298	of a subprime high-cost home loan that refinances all or any
299	portion of such existing loan or debt.
300	(11)(12)  PROHIBITED DOOR-TO-DOOR LOANS.--A subprime high-
301	cost home loan may not be made as a direct result of a potential
302	or future lender or its representative offering or selling a
303	subprime high-cost home loan at the residence of a potential
304	borrower without a prearranged appointment with the potential
305	borrower or the expressed invitation of the potential borrower.
306	This subsection does not apply to mail solicitations that may be
307	received by the potential borrower.
308	(12)(13)  LATE PAYMENT FEES.--A lender may not charge a
309	late payment fee for a subprime high-cost home loan except as
310	provided in this subsection:
311	(a)  A late payment fee may not be in excess of 5 percent
312	of the amount of the payment past due.
313	(b)  A late payment fee may only be assessed for a payment
314	past due for 15 days or more.
315	(c)  A late payment fee may not be charged more than once
316	with respect to a single late payment. If a late payment fee is
317	deducted from a payment made on the loan and such deduction
318	causes a subsequent default on a subsequent payment, no late
319	payment fee may be imposed for such default. If a late payment
320	fee has been imposed once with respect to a particular late
321	payment, no such fee shall be imposed with respect to any future
322	payment which would have been timely and sufficient, but for the
323	previous default.
324	(13)(14)  MODIFICATION OR DEFERRAL FEES.--A lender may not
325	charge a borrower any fees or other charges to modify, renew,
326	extend, or amend a subprime high-cost home loan or to defer any
327	payment due under the terms of a subprime high-cost home loan on
328	a minimum of one modification, renewal, extension, or deferral
329	per each 12 months of the length of the loan.
330	(14)  MANDATORY ARBITRATION CLAUSE.--No subprime home loan
331	may be subject to a mandatory arbitration clause that limits in
332	any way the right of the borrower to seek relief through the
333	judicial process for any and all claims and defenses the
334	borrower may have against the lender, broker, or other party
335	involved in the loan transaction.
336	(15)  BALANCES; FEES; TIME.--No lender may charge a fee for
337	informing or transmitting to any person the balance due to pay
338	off a home loan or to provide a release upon prepayment. Payoff
339	balances shall be provided within a reasonable time, but in any
340	event no more than 7 business days after the request.
341	(16)  INSURANCE AND DEBT CANCELLATION AGREEMENTS.--No
342	lender making a subprime home loan shall finance, directly or
343	indirectly, any credit life, credit disability, credit
344	unemployment, or credit property insurance, or any other life or
345	health insurance, or any payments directly or indirectly for any
346	debt cancellation or suspension agreement or contract, except
347	that insurance premiums or debt cancellation or suspension fees
348	calculated and paid on a monthly basis shall not be considered
349	financed by the lender.
350	(17)  FINANCING FEES AND CHARGES.--In making a subprime
351	home loan, a lender may not directly or indirectly finance:
352	(a)  Any points and fees; or
353	(b)  Any other charges payable to third parties.
354	(18)  NO BENEFIT FROM REFINANCING EXISTING SUBPRIME HOME
355	LOAN WITH A NEW HIGH-COST HOME LOAN.--A lender may not charge a
356	borrower points and fees in connection with a subprime home loan
357	if the proceeds of the subprime home loan are used to refinance
358	an existing subprime home loan held by the same lender as note
359	holder.
360	(19)  NOTICE OF FIXED RATE LOAN.--Before making an
361	adjustable rate loan, a lender must disclose to the borrower the
362	terms and costs associated with a fixed rate loan from the same
363	lender at the lowest annual percentage rate for which the
364	borrower qualifies.
365	Section 4.  Section 494.00792, Florida Statutes, is amended
366	to read:
367	494.00792  Required disclosures for subprime high-cost home
368	loans.--
369	(1)  In addition to other disclosures required by law and
370	in conspicuous type:
371	(a)  Notice to borrower.--A lender making a subprime high-
372	cost home loan shall provide the following written a notice in
373	at least 12-point boldfaced type to a borrower acknowledged in
374	writing and signed by the borrower, not later than the time the
375	notice provided in 12 C.F.R. s. 226.31(c) is required in
376	substantially the following form:
377
378	NOTICE TO BORROWER
379
380	If you accept obtain this subprime high-cost home loan, the
381	lender will have a mortgage on your home. You could lose your
382	home and any money you have put into it if you do not meet your
383	obligations under the loan. You should be aware that you might
384	be able to obtain a loan at a lower cost.
385	Mortgage loan rates and closing costs and fees vary based
386	on many factors, including your particular credit and financial
387	circumstances, your employment history, the loan-to-value
388	requested, and the type of property that will secure your loan.
389	The loan rate and fees could also vary based upon which lender
390	or broker you select. As a borrower, you should shop around and
391	compare loan rates and fees.
392	You should also consider consulting a qualified independent
393	credit counselor or other experienced financial adviser
394	regarding the rates, fees, and provisions of this mortgage loan
395	before you proceed. You should contact the United States
396	Department of Housing and Urban Development for a list of credit
397	counselors available in your area.
398	You are not required to complete this agreement merely
399	because you have received these disclosures or have signed a
400	loan application.
401	Borrowing for the purpose of debt consolidation can be an
402	appropriate financial management tool. However, if you continue
403	to incur significant new credit card charges or other debts
404	after this subprime high-cost home loan is closed and then
405	experience financial difficulties, you could lose your home and
406	any equity you have in it if you do not meet your mortgage loan
407	obligations.
408	Remember that property taxes and homeowners' insurance are
409	your responsibility. Not all lenders provide escrow services for
410	these payments. You should ask your lender about these services.
411	Also, your payments on existing debts contribute to your
412	credit rating. You should not accept any advice to ignore your
413	regular payments to your existing creditors.
414	(b)  Annual percentage rate.--A lender making a subprime
415	high-cost home loan shall disclose:
416	1.  In the case of a fixed mortgage, the annual percentage
417	rate and the amount of the regular monthly payment.
418	2.  In the case of any other credit transaction, the annual
419	percentage rate, the amount of the regular monthly payment and
420	the amount of any balloon payment permitted under this section,
421	a statement that the interest rate and monthly payment may
422	increase, and the amount of the maximum monthly payment based
423	upon the maximum interest rate allowed pursuant to law.
424	(c)  Notice to purchasers and assignees.--All subprime
425	high-cost home loans shall contain the following notice:
426	Notice: This is a mortgage subject to the provisions of the
427	Florida Fair Lending Act. Purchasers and assignees of this
428	mortgage could be liable for all claims and defenses with
429	respect to the mortgage which the borrower could assert against
430	the lender creditor.
431	(2)  TIMING OF DISCLOSURE.--
432	(a)  The disclosure required by this subsection shall be
433	given not less than 3 business days prior to the consummation of
434	the subprime high-cost home loan.
435	(b)  New disclosures are required when, after disclosure is
436	made, the lender making the subprime high-cost home loan changes
437	the terms of the extension of credit, including if such changes
438	make the original disclosures inaccurate, unless new disclosures
439	are provided that meet the requirements of this section.
440	(c)  In addition to any other right to rescission, the
441	borrower has the right to rescind the subprime home loan until
442	midnight of the 3rd business day after consummation, delivery of
443	the rescission notice, or delivery of all material disclosures,
444	whichever occurs last. The lender shall provide appropriate
445	forms for the borrower to exercise his or her right to
446	rescission using the notice and forms required by 15 U.S.C. s.
447	1635(a) and implementing regulations.
448	(c)  A lender may provide new disclosures pursuant to
449	paragraph (b) by telephone, if:
450	1.  The change is initiated by the borrower.
451	2.  At the consummation of the high-cost home loan:
452	a.  The lender provides the disclosures in writing to the
453	borrower.
454	b.  The lender and the borrower certify in writing that the
455	new disclosures were provided by telephone no later than 3 days
456	prior to the consummation of the high-cost home loan.
457	(d)  A creditor must disclose to any high-cost home loan
458	borrower the rights of the borrower to rescind the high-cost
459	home loan within 3 business days pursuant to 15 U.S.C. s.
460	1635(a) and shall provide appropriate forms for the borrower to
461	exercise his or her right to rescission. The notice, forms, and
462	provisions thereof must be in accordance with the requirements
463	of 15 U.S.C. s. 1635(a).
464	Section 5.  Section 494.00793, Florida Statutes, is amended
465	to read:
466	494.00793  Liability of purchasers and
467	assignees.--Notwithstanding any provision of any other law, the
468	remedies provided by this act apply to the lender; any director,
469	officer, employee, or controlling stockholder of, or agent for,
470	a lender who personally participated in the making or approving
471	of a subprime home loan; and any other persons to whom this act
472	applies and who violated the requirements of this act. Any
473	person who purchases or is otherwise assigned a subprime high-
474	cost home loan shall be subject to all claims and defenses with
475	respect to that loan mortgage that the borrower could assert
476	against the original lender creditor of the loan mortgage, to
477	the same extent and subject to the same limitations that a
478	borrower of a high-cost home loan may assert against an assignee
479	or purchaser pursuant to 15 U.S.C. s. 1641.
480	Section 6.  Subsection (1), paragraphs (c) and (d) of
481	subsection (2), and subsection (3) of section 494.00794, Florida
482	Statutes, are amended to read:
483	494.00794  Right to cure subprime high-cost home loans.--
484	(1)  RIGHT TO REINSTATE.--For a subprime high-cost home
485	loan, if a lender asserts that grounds for acceleration exist
486	and requires the payment in full of all sums secured by the
487	security instrument, the borrower, or anyone authorized to act
488	on the borrower's behalf, shall have the right, during the 45-
489	day period set forth in subsection (2), to cure the default and
490	reinstate the home loan by tendering the amount or performance
491	as specified in this section. However, once a lender has
492	provided two such notices as required by this section, for two
493	separate incidents, a lender is not thereafter required to
494	provide the notice required by this section, and the borrower is
495	not entitled by this section to cure the default, for a third or
496	subsequent incident for which the lender asserts that grounds
497	exist for acceleration of the loan and repayment in full. Cure
498	of default as provided in this section shall reinstate the
499	borrower to the same position as if the default had not occurred
500	and shall nullify, as of the date of the cure, any acceleration
501	of any obligation under the security instrument or note arising
502	from the default.
503	(2)  GROUNDS FOR REINSTATEMENT.--Before any action filed to
504	foreclose upon the home or other action is taken to seize or
505	transfer ownership of the home, a notice of the right to cure
506	the default must be delivered to the borrower at the address of
507	the property upon which any security exists for the home loan by
508	postage prepaid certified United States mail, return receipt
509	requested, which notice is effective upon deposit in the United
510	States mail, and shall inform the borrower:
511	(c)  That if the borrower does not cure the default by the
512	date specified, the lender creditor may take steps to terminate
513	the borrower's ownership of the property by requiring payment in
514	full of the home loan and commencing a foreclosure proceeding or
515	other action to seize the home.
516	(d)  Of the name and address of the lender creditor and the
517	telephone number of a representative of the lender creditor whom
518	the borrower may contact if the borrower disagrees with the
519	lender's creditor's assertion that a default has occurred or the
520	correctness of the lender's creditor's calculation of the amount
521	required to cure the default.
522	(3)  FEES.--To cure a default under this section, a
523	borrower shall not be required to pay any charge, fee, or
524	penalty attributable to the exercise of the right to cure a
525	default as provided for in this section, other than the fees
526	specifically allowed by this act. The borrower shall not be
527	liable for any attorney's fees or costs relating to the
528	borrower's default that are incurred by the lender creditor
529	prior to or during the 45-day period set forth in paragraph
530	(2)(b).
531	Section 7.  Section 494.00796, Florida Statutes, is amended
532	to read:
533	494.00796  Corrections and unintentional violations
534	Enforcement.--
535	(1)  Any person or the agent, officer, or other
536	representative of any person committing a material violation of
537	the provisions of this act shall forfeit the entire interest
538	charged in the high-cost home loan or contracted to be charged
539	or received, and only the principal sum of such high-cost home
540	loan can be enforced in any court in this state, either at law
541	or in equity.
542	(2)  A lender creditor in a subprime home loan who, when
543	acting in good faith, fails to comply with the provisions of
544	this act shall not be deemed to have violated this act if the
545	lender creditor establishes that:
546	(1)  Within 30 days after the loan closing, and prior to
547	receiving any notice from the borrower of the compliance
548	failure, the lender has made appropriate restitution to the
549	borrower, and appropriate adjustments are made to the loan; or
550	(2)  Within 60 days after the loan closing and prior to
551	receiving any notice from the borrower of the compliance
552	failure, and the compliance failure was not intentional and
553	resulted from a bona fide error notwithstanding the maintenance
554	of procedures reasonably adapted to avoid such errors, the
555	borrower is notified of the compliance failure, appropriate
556	restitution is made to the borrower, and appropriate adjustments
557	are made to the loan. within 60 days after receiving any notice
558	from the borrower of the compliance failure, which compliance
559	failure was not intentional and resulted from a bona fide error
560	notwithstanding the maintenance of procedures reasonably adapted
561	to avoid such errors, the borrower has been notified of the
562	compliance failure, appropriate restitution has been made to the
563	borrower, and appropriate adjustments are made to the loan. Bona
564	fide errors shall include, but not be limited to, clerical,
565	calculation, computer malfunction and programming, and printing
566	errors. An error of legal judgment with respect to a person's
567	obligations under this section is not a bona fide error.
568	(3)  The remedies provided in this section are cumulative.
569	Section 8.  Section 494.00798, Florida Statutes, is created
570	to read:
571	494.00798  Civil remedies.--
572	(1)  Any violation of this act constitutes a violation of
573	the Florida Deceptive and Unfair Trade Practices Act and all
574	remedies under that act are available for an action under that
575	act.
576	(2)  Any person found to have violated this act shall be
577	liable to the borrower for the following:
578	(a)  Actual, incidental, and consequential damages.
579	(b)  Statutory damages equal to the finance charges agreed
580	to in the home loan agreement plus 10 percent of the amount
581	financed.
582	(c)  Punitive damages when the violation was malicious or
583	reckless.
584	(d)  Costs and reasonable attorney's fees.
585	(3)  A borrower may be granted injunctive, declaratory, and
586	such other equitable relief as the court deems appropriate in an
587	action to enforce compliance with this act.
588	(4)  The intentional violation of the act renders the
589	subprime home loan agreement void, and the lender shall have no
590	right to collect, receive, or retain any principal, interest, or
591	other charges whatsoever with respect to the loan, and the
592	borrower may recover any payments made under the agreement.
593	(5)  The right of rescission granted under 15 U.S.C. ss.
594	1601 et seq. for violation of that law and all remedies provided
595	in this section shall be available to a borrower by way of
596	recoupment against a party foreclosing on the home loan or
597	collecting on the loan at any time during the term of the loan.
598	(6)  The remedies provided in this section are not intended
599	to be the exclusive remedies available to a borrower, nor must
600	the borrower exhaust any administrative remedies provided under
601	this act or any other applicable law before proceeding under
602	this section.
603	(7)  The remedies provided in this section are cumulative
604	and do not restrict any other right or remedy otherwise
605	available to the borrower.
606	Section 9.  Section 494.00799, Florida Statutes, is created
607	to read:
608	494.00799  Criminal violations.--A person, including any
609	member, officer, or director of the lender, who intentionally
610	violates any provision of this act commits a felony of the third
611	degree, punishable as provided in s. 775.082, s. 775.083, or s.
612	775.084.
613	Section 10.  If any provision of this act or its
614	application to any person or circumstance is held invalid, the
615	invalidity does not affect other provisions or applications of
616	the act which can be given effect without the invalid provision
617	or application, and to this end the provisions of this act are
618	declared severable.
619	Section 11.  This act shall take effect October 1, 2008.

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