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A bill to be entitled

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An act relating to foreclosure fraud; providing

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legislative findings and intent with respect to the need

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to protect homeowners who enter into agreements designed

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to save their homes from foreclosure; providing

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definitions; prohibiting a foreclosure consultant from

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engaging in certain acts or failing to perform contracted

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services; requiring that all agreements for foreclosure-

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related services and foreclosure-rescue services be in

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writing; specifying information that must be in the

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written agreement; requiring that certain statements in

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the written agreement be in bold type, in uppercase

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letters, and of a specified size; providing that the

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homeowner has a right to cancel the agreement for a

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specified period and the right may not be waived;

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providing that the homeowner has a specified period during

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which to cure a default under certain circumstances;

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requiring that an equity purchaser verify the homeowner's

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ability to make payments under a repurchase agreement;

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providing that a foreclosure-rescue transaction involving

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a lease option or other repurchase agreement creates a

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rebuttable presumption that the transaction is a loan

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transaction and the conveyance from the homeowner to the

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equity purchaser is a mortgage; providing that a person

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who violates certain provisions of the act commits an

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unfair and deceptive trade practice as defined in ch. 501,

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F.S.; providing an effective date.

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

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     Section 1. Legislative findings and intent.--The

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Legislature finds that homeowners who are in default on their

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mortgages, in foreclosure, or at risk of losing their home due to

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nonpayment of taxes may be vulnerable to fraud, deception, and

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unfair dealings with foreclosure consultants or foreclosure

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purchasers. The intent of sections 1-7 of this act is to provide

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a homeowner with information necessary to make an informed and

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intelligent decision regarding the sale or transfer of his or her

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home to an equity purchaser. It is the further intent of sections

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1-7 of this act to require that the sales agreement be expressed

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in writing in order to safeguard homeowners against deceit and

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financial hardship; to ensure, foster, and encourage fair dealing

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in the sale and purchase of homes in foreclosure or default; to

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prohibit representations that tend to mislead; to prohibit or

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restrict unfair contract terms; to provide a cooling-off period

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for homeowners who enter into contracts for services related to

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saving their homes from foreclosure or preserving their rights to

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possession of their home; to afford homeowners a reasonable and

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meaningful opportunity to rescind sales to equity purchasers; and

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to preserve and protect home equity for the homeowners of this

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state.

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     Section 2. Definitions.--As used in sections 1-7 of this

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act, the term:

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     (1) "Equity purchaser" means any person who acquires title

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to any residential real property as a result of a foreclosure-

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rescue transaction. The term does not apply to a person who

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acquires the title:

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     (a) To occupy the property as his or her primary residence;

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     (b) By a deed from a foreclosure sale conducted under

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chapter 45, Florida Statutes;

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     (c) At a sale of property authorized by statute;

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     (d) By order or judgment of any court;

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     (e) From a spouse, parent, grandparent, child, grandchild,

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or sibling of the person or the person's spouse; or

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     (f) As a deed in lieu of foreclosure, a work-out agreement,

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a bankruptcy plan, or any other agreement between a foreclosing

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lender and a homeowner.

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     (2) "Foreclosure consultant" means a person who directly or

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indirectly makes a solicitation, representation, or offer to a

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homeowner to provide or perform, in return for payment of money

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or other valuable consideration, foreclosure-related services.

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The term does not apply to:

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     (a) A person licensed to practice law in this state when

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rendering foreclosure-related services in the course of his or

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her practice as an attorney at law.

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     (b) A person licensed as a real estate broker under chapter

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475, Florida Statutes, if the person is acting within the course

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and scope of a broker as defined in s. 475.01, Florida Statutes.

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     (c) A person licensed as a mortgage broker or mortgage

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lender under chapter 494, Florida Statutes, if the person is

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acting within the course and scope of a mortgage broker as

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defined in part II of chapter 494, Florida Statutes, or a

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mortgage lender as described in part III of chapter 494, Florida

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Statutes.

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     (d) A person acting under the express authority or written

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approval of the United States Department of Housing and Urban

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Development or other department or agency of the United States or

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this state to provide foreclosure-related services.

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     (e) A charitable, not-for-profit agency or organization, as

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determined by the United States Internal Revenue Service under

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s. 501(c)(3) of the Internal Revenue Code, that offers counseling

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or advice to an owner of residential real property in foreclosure

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or loan default if the agency or organization does not contract

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for foreclosure-related services with a for-profit lender or

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person facilitating or engaging in foreclosure-rescue

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transactions.

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     (f) A person who holds or is owed an obligation secured by

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a lien on any residential real property in foreclosure if the

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person performs foreclosure-related services in connection with

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this obligation or lien and the obligation or lien did not arise

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as the result of or as part of a proposed foreclosure

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reconveyance or foreclosure-rescue transaction.

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     (g) A financial institution as defined in s. 655.005,

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Florida Statutes, or any subsidiary or affiliate thereof.

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     (3) "Foreclosure-related services" means any good or

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service related to, or promising assistance in connection with:

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     (a) Stopping, avoiding, or delaying actual or anticipated

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foreclosure proceedings concerning residential real property; or

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     (b) Curing or otherwise addressing a default or failure to

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timely pay with respect to a residential mortgage loan

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obligation.

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     (4) "Foreclosure-rescue transaction" means a transaction:

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     (a) By which residential real property is conveyed to an

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equity purchaser and the homeowner maintains a legal or equitable

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interest in the residential real property conveyed, including,

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without limitation, a lease interest, an option to acquire the

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property, an interest as beneficiary or trustee to a land trust,

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or other interest in the property conveyed; and

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     (b) That is designed or intended by the parties to stop,

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avoid, or delay actual or anticipated foreclosure proceedings

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against a homeowner's residential real property.

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     (5) "Homeowner" means any record title owner of residential

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real property that is the subject of actual or anticipated

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foreclosure proceedings.

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     (6) "Residential real property" means real property

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consisting of one-family to four-family dwelling units, one of

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which is occupied by the owner as his or her principal place of

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residence.

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     (7) "Residential real property in foreclosure" means

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residential real property against which there is an outstanding

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notice of the pendency of foreclosure recorded pursuant to s.

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48.23, Florida Statutes, against which a summons and complaint

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has been served under chapter 702, Florida Statutes, or which is

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owned by a person who is more than 90 days delinquent on any loan

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that is secured by the property.

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     Section 3. Prohibited acts.--In the course of offering or

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providing foreclosure-related services, a foreclosure consultant,

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including the consultant's sales persons, agents,

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representatives, or independent contractors, may not:

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     (1) Engage in or initiate foreclosure-related services

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without first executing a written agreement for foreclosure-

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related services; or

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     (2) Solicit, charge, receive, or attempt to collect or

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secure payment, directly or indirectly, for foreclosure-related

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services before successfully completing or performing all

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services contained in the agreement for foreclosure-related

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services.

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     Section 4. Foreclosure-related services; written

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agreement.--

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     (1) The written agreement for foreclosure-related services

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must be printed in at least 12-point type and signed by both

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parties. The agreement must include the name and address of the

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person providing foreclosure-related services, the exact nature

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and specific detail of each service to be provided, the total

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amount and terms of charges to be paid by the homeowner for the

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services, and the date of the agreement. The date of the

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agreement may not be any earlier than the date the homeowner

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signed the agreement. The foreclosure-rescue consultant must give

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the homeowner a copy of the agreement to review not less than 24

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hours before the homeowner is to sign the agreement.

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     (2) The written agreement must clearly state that the

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homeowner may cancel the written agreement without any penalty or

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obligation if the homeowner cancels the agreement within 5

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business days after signing the written agreement. The right to

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cancel may not be waived by the homeowner or limited in any

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manner by the foreclosure-rescue consultant. If the homeowner

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cancels the contract, any payments that have been given to the

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consultant must be returned to the homeowner within 10 days after

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receiving the notice of cancellation.

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     (3) An agreement for foreclosure-related services must

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contain, immediately above the signature line for the homeowner

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in bold type and uppercase letters in a minimum size of 14

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points, the following disclosures:

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HOMEOWNER'S RIGHT OF CANCELLATION

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     YOU MAY CANCEL THIS AGREEMENT FOR FORECLOSURE-RELATED

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SERVICES WITHOUT ANY PENALTY OR OBLIGATION WITHIN 5 BUSINESS DAYS

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FOLLOWING THE DATE THIS AGREEMENT IS SIGNED BY YOU.

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     THE FORECLOSURE CONSULTANT IS PROHIBITED BY LAW FROM

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ACCEPTING ANY MONEY, PROPERTY, OR OTHER FORM OF PAYMENT FROM YOU

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UNTIL ALL PROMISED SERVICES ARE COMPLETE. IF FOR ANY REASON YOU

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HAVE PAID THE CONSULTANT BEFORE CANCELLATION, YOUR PAYMENT MUST

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BE RETURNED TO YOU NO LATER THAN 10 DAYS AFTER THE CONSULTANT

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RECEIVES YOUR CANCELLATION NOTICE.

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     TO CANCEL THIS AGREEMENT, A SIGNED AND DATED COPY OF A

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STATEMENT THAT YOU ARE CANCELLING THE AGREEMENT SHOULD BE MAILED

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(POSTMARKED) OR DELIVERED TO ________________ (NAME) AT

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_______________(ADDRESS) NO LATER THAN MIDNIGHT OF

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___________(DATE).

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     IMPORTANT: IT IS RECOMMENDED THAT YOU CONTACT YOUR LENDER OR

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MORTGAGE SERVICE BEFORE SIGNING THIS AGREEMENT. YOUR LENDER OR

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MORTGAGE SERVICE MAY BE WILLING TO NEGOTIATE A PAYMENT PLAN WITH

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YOU FREE OF CHARGE.

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     (4) The inclusion of the disclosures does not prohibit the

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foreclosure-rescue consultant from giving the homeowner more time

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in which to cancel the agreement than is set forth in the

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disclosures.

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     (5) The foreclosure-rescue consultant must give the

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homeowner a copy of the signed agreement immediately after the

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homeowner signs the agreement.

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     Section 5. Foreclosure-rescue transactions; written

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agreement.--

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     (1)(a) In any foreclosure-rescue transaction there must be

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a written agreement prepared in at least 12-point bold type which

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is fully completed, signed, and dated by the homeowner and the

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equity purchaser before executing any instrument quitclaiming,

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assigning, transferring, conveying, or encumbering an interest in

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the residential real property subject to foreclosure. The equity

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purchaser must give the homeowner a copy of the completed

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agreement immediately after the homeowner signs the agreement.

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The agreement must contain the entire understanding of the

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parties and must include:

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     1. The name, business address, and telephone number of the

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equity purchaser;

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     2. The street address and full legal description of the

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property;

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     3. Clear and conspicuous disclosure of any financial or

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legal obligations of the homeowner which will be assumed by the

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equity purchaser;

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     4. The total consideration to be paid by the equity

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purchaser in connection with or incident to the acquisition by

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the equity purchaser of the property;

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     5. The terms of payment or other consideration, including,

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but not limited to, any services that the equity purchaser

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represents will be performed for the homeowner before or after

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the sale; and

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     6. The date and time when possession of the property is to

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be transferred to the equity purchaser.

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     (b) Every foreclosure-rescue transaction agreement must

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contain, above the signature line for the homeowner, a statement

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in 16-point bold type which complies substantially with the

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following:

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I understand that under this agreement I am selling my house

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to the other undersigned party.

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     (c) Each foreclosure-rescue transaction agreement must

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state the specifications of any option or right to repurchase the

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residential real property in foreclosure, including the specific

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amounts of any escrow payments or deposit, down payment, purchase

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price, closing costs, commissions, or other fees or costs.

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     (2) An equity purchaser must give the homeowner, at the

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time the written agreement is signed, a notice stating that the

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homeowner may cancel the purchase without penalty if the

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homeowner notifies the equity purchaser within 5 business days

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after signing the agreement. The equity purchaser must return to

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the homeowner any moneys paid by the homeowner within 30 days

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after the homeowner notifies the equity purchaser. The right to

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cancel in this section does not limit or otherwise affect the

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homeowner's right to cancel the agreement under any other law.

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The right to cancel is not conditioned upon the homeowner's

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repayment of money paid to the homeowner under the foreclosure-

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rescue transaction. The right to cancel may not be waived by the

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homeowner or limited in any way by the equity purchaser. Notice

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or the right to cancel must serve as the cover sheet to the

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written agreement to enter into a foreclosure-rescue transaction.

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The notice must be on a separate sheet of paper with no other

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written or pictorial material, in at least 12-point bold type,

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double-spaced, and read as follows:

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NOTICE TO THE HOMEOWNER/SELLER

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     PLEASE READ THIS FORM COMPLETELY AND CAREFULLY. IT CONTAINS

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VALUABLE CANCELLATION RIGHTS.

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     BY THIS CONTRACT YOU ARE AGREEING TO SELL YOUR HOME. YOU MAY

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CANCEL THIS TRANSACTION AT ANY TIME BEFORE 5:00 P.M. OF THE FIFTH

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BUSINESS DAY FOLLOWING RECEIPT OF THIS NOTICE.

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     THIS CANCELLATION RIGHT MAY NOT BE WAIVED IN ANY MANNER BY

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YOU OR BY THE PURCHASERS.

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     ANY MONEY PAID TO YOU MUST BE RETURNED TO THE PURCHASER

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WITHIN 30 DAYS AFTER CANCELLATION.

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     TO CANCEL, SIGN THIS FORM, AND RETURN IT TO THE PURCHASER BY

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5:00 P.M. ON ___________(DATE) AT ________________________

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(ADDRESS) . IT IS BEST TO MAIL IT BY CERTIFIED MAIL OR OVERNIGHT

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DELIVERY, RETURN RECEIPT REQUESTED, AND TO KEEP A PHOTOCOPY OF

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THE SIGNED FORM AND YOUR POST OFFICE RECEIPT.

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     I (we) hereby cancel this transaction.

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     _______________________________________     Seller's Signature

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     __________________________________     Printed Name of Seller

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     _______________________________________     Seller's Signature

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     __________________________________     _Printed Name of Seller

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          _________________________________________     ____Date

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     (3) In any foreclosure-rescue transaction in which the

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homeowner is provided the right to repurchase the residential

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real property, the homeowner has a 30-day right to cure any

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default of the terms of the contract and this right to cure may

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be exercised on at least three separate occasions during the life

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of the foreclosure-rescue transaction or any agreement by the

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parties. The homeowner's right to cure must be included in any

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written agreement required by this section.

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     (4) In any foreclosure-rescue transaction, before or at the

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time of conveyance, the equity purchaser must fully assume or

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discharge any lien in foreclosure as well as any prior liens that

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will not be extinguished by the foreclosure, which assumption or

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discharge must be accomplished without violating the terms and

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conditions of the liens being assumed or discharged.

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     (5) If the homeowner has the right to repurchase the

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residential real property, the equity purchaser must verify and

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be able to demonstrate that the homeowner has or will have a

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reasonable ability to make the required payments to exercise the

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option to repurchase under the written agreement. For purposes of

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this section, there is a rebuttable presumption that the

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homeowner has a reasonable ability to make payments and to

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repurchase the property if the homeowner's payments for primary

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housing expenses and regular principal and interest payments on

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other personal debt do not exceed 60 percent of the homeowner's

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monthly gross income.

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     (6) If the homeowner has the right to repurchase the

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residential real property, the price the homeowner pays may not

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be unconscionable, unfair, or commercially unreasonable. A

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repurchase price offered within 2 years after the sale of the

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residential real property in foreclosure which exceeds 25 percent

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of the price at which the equity purchaser acquired the property

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creates a rebuttable presumption that the foreclosure-rescue

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transaction was unconscionable. The acquisition price paid by the

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equity purchaser may include any actual costs incurred by the

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purchaser in acquiring the property.

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     Section 6. Rebuttable presumption.--Any foreclosure-rescue

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transaction involving a lease option or other repurchase

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agreement creates a rebuttable presumption that the transaction

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is a loan transaction and the conveyance from the homeowner to

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the equity purchaser is a mortgage.

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     Section 7. Violations.--A person who violates any provision

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of sections 1-6 of this act commits an unfair and deceptive trade

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practice as defined in part II of chapter 501, Florida Statutes.

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Violators are subject to the penalties and remedies provided in

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part II of chapter 501, Florida Statutes, including a monetary

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penalty not to exceed $15,000 per violation.

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     Section 8.  This act shall take effect July 1, 2008.