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A bill to be entitled

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An act relating to foreclosure fraud; creating s.

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501.1377, F.S.; providing legislative findings and intent

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with respect to the need to protect homeowners who enter

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into agreements designed to save their homes from

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foreclosure; providing definitions; prohibiting a

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foreclosure-rescue consultant from engaging in certain

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acts or failing to perform contracted services; requiring

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that all agreements for foreclosure-related rescue

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services and foreclosure-rescue transactions 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 uppercase letters and of a

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specified size; providing that the homeowner has a right

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to cancel the agreement for a specified period and the

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right may not be waived; providing that the homeowner has

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a specified period during which to cure a default under

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certain circumstances; requiring equity purchasers to

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assume or discharge certain liens; requiring that an

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equity purchaser verify the homeowner's ability to make

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payments under a repurchase agreement; providing price

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limitations for repurchase transactions; providing for a

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rebuttable presumption of certain transactions being

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unconscionable under certain circumstances; providing for

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limited application of the presumption; providing an

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exclusion; providing that a foreclosure-rescue transaction

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involving a lease option or other repurchase agreement

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creates a rebuttable presumption that the transaction is a

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loan transaction and the conveyance from the homeowner to

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the equity purchaser is a mortgage; providing limited

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application of the presumption; providing an exclusion;

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providing that a person who violates certain provisions

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commits an unfair and deceptive trade practice as defined

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in part II of ch. 501, F.S.; providing penalties;

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repealing s. 501.2078, F.S., relating to violations

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involving individual homeowners during the course of

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residential foreclosure proceedings; providing an

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effective date.

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

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     Section 1.  Section 501.1377, Florida Statutes, is created

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to read:

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     501.1377 Violations involving homeowners during the course

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of residential foreclosure proceedings.--

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     (1) LEGISLATIVE FINDINGS AND INTENT.--The Legislature finds

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that homeowners who are in default on their mortgages, in

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foreclosure, or at risk of losing their homes due to nonpayment

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

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dealings with foreclosure-rescue consultants or equity

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purchasers. The intent of this section is to provide a homeowner

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with information necessary to make an informed decision regarding

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the sale or transfer of his or her home to an equity purchaser.

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It is the further intent of this section to require that

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foreclosure-related rescue services agreements be expressed in

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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 homes; 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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     (2) DEFINITIONS.--As used in this section, the term:

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     (a) "Equity purchaser" means any person who acquires a

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legal, equitable, or beneficial ownership interest in any

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residential real property as a result of a foreclosure-rescue

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transaction. The term does not apply to a person who acquires the

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legal, equitable, or beneficial interest in such property:

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     1. By a certificate of title from a foreclosure sale

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conducted under chapter 45;

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     2. At a sale of property authorized by statute;

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     3. By order or judgment of any court;

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     4. 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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     5. As a deed in lieu of foreclosure, a workout agreement, a

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bankruptcy plan, or any other agreement between a foreclosing

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lender and a homeowner.

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     (b) "Foreclosure-rescue consultant" means a person who

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directly or indirectly makes a solicitation, representation, or

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offer to a homeowner to provide or perform, in return for payment

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of money or other valuable consideration, foreclosure-related

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rescue services. The term does not apply to:

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     1. A person excluded under s. 501.212.

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     2. 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 rescue services.

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     3. A charitable, not-for-profit agency or organization, as

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determined by the United States Internal Revenue Service under s.

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501(c)(3) of the Internal Revenue Code, which 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 rescue services with a for-profit lender

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or person facilitating or engaging in foreclosure-rescue

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transactions.

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     4. A person who holds or is owed an obligation secured by a

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lien on any residential real property in foreclosure if the

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person performs foreclosure-related rescue services in connection

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with this obligation or lien and the obligation or lien was not

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the result of or part of a proposed foreclosure reconveyance or

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foreclosure-rescue transaction.

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     5. A financial institution as defined in s. 655.005 and any

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parent or subsidiary of the financial institution or of the

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parent or subsidiary.

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     6. A licensed mortgage broker, mortgage lender, or

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correspondent mortgage lender that provides mortgage counseling

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or advice regarding residential real property in foreclosure,

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which counseling or advice is within the scope of services set

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forth in chapter 494 and is provided without payment of money or

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other consideration other than a mortgage brokerage fee as

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defined in s. 494.001.

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     (c) "Foreclosure-related rescue services" means any good or

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service related to, or promising assistance in connection with:

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     1. Stopping, avoiding, or delaying foreclosure proceedings

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concerning residential real property; or

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     2. 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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     (d) "Foreclosure-rescue transaction" means a transaction:

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     1. By which residential real property in foreclosure is

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conveyed to an equity purchaser and the homeowner maintains a

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legal or equitable interest in the residential real property

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conveyed, including, without limitation, a lease option interest,

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an option to acquire the property, an interest as beneficiary or

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trustee to a land trust, or other interest in the property

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conveyed; and

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     2. That is designed or intended by the parties to stop,

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avoid, or delay foreclosure proceedings against a homeowner's

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residential real property.

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

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real property that is the subject of foreclosure proceedings.

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     (f) "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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     (g) "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 proceedings recorded

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pursuant to s. 48.23.

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     (3) PROHIBITED ACTS.--In the course of offering or

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providing foreclosure-related rescue services, a foreclosure-

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rescue consultant may not:

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     (a) Engage in or initiate foreclosure-related rescue

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services without first executing a written agreement with the

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homeowner for foreclosure-related rescue services; or

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

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secure payment, directly or indirectly, for foreclosure-related

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rescue services before completing or performing all services

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contained in the agreement for foreclosure-related rescue

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services.

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     (4) FORECLOSURE-RELATED RESCUE SERVICES; WRITTEN

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AGREEMENT.--

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     (a) The written agreement for foreclosure-related rescue

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services must be printed in at least 12-point uppercase type and

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signed by both parties. The agreement must include the name and

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address of the person providing foreclosure-related rescue

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services, the exact nature and specific detail of each service to

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be provided, the total amount and terms of charges to be paid by

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the homeowner for the services, and the date of the agreement.

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The date of the agreement may not be earlier than the date the

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homeowner signed the agreement. The foreclosure-rescue consultant

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must give the homeowner a copy of the agreement to review not

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less than 1 business day before the homeowner is to sign the

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agreement.

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     (b) The homeowner has the right to cancel the written

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agreement without any penalty or obligation if the homeowner

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cancels the agreement within 3 business days after signing the

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written agreement. The right to cancel may not be waived by the

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homeowner or limited in any manner by the foreclosure-rescue

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consultant. If the homeowner cancels the agreement, any payments

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that have been given to the foreclosure-rescue consultant must be

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returned to the homeowner within 10 business days after receipt

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of the notice of cancellation.

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     (c) An agreement for foreclosure-related rescue services

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must contain, immediately above the signature line, a statement

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in at least 12-point uppercase type that substantially complies

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with the following:

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HOMEOWNER'S RIGHT OF CANCELLATION

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     YOU MAY CANCEL THIS AGREEMENT FOR FORECLOSURE-RELATED RESCUE

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SERVICES WITHOUT ANY PENALTY OR OBLIGATION WITHIN 3 BUSINESS DAYS

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FOLLOWING THE DATE THIS AGREEMENT IS SIGNED BY YOU.

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     THE FORECLOSURE-RESCUE 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 BUSINESS DAYS AFTER THE

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CONSULTANT 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 SERVICER BEFORE SIGNING THIS AGREEMENT. YOUR LENDER OR

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MORTGAGE SERVICER MAY BE WILLING TO NEGOTIATE A PAYMENT PLAN OR A

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RESTRUCTURING WITH YOU FREE OF CHARGE.

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     (d) The inclusion of the statement 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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statement, provided all other requirements of this subsection are

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met.

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     (e) The foreclosure-rescue consultant must give the

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homeowner a copy of the signed agreement within 1 business day

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after the homeowner signs the agreement.

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     (5) FORECLOSURE-RESCUE TRANSACTIONS; WRITTEN AGREEMENT.--

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     (a)1. A foreclosure-rescue transaction must include a

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written agreement prepared in at least 12-point uppercase type

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

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equity purchaser before executing any instrument from the

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homeowner to the equity purchaser quitclaiming, assigning,

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transferring, conveying, or encumbering an interest in the

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residential real property in foreclosure. The equity purchaser

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must give the homeowner a copy of the completed agreement within

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1 business day after the homeowner signs the agreement. The

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agreement must contain the entire understanding of the parties

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and must include:

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

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equity purchaser.

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     b. The street address and full legal description of the

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property.

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     c. Clear and conspicuous disclosure of any financial or

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legal obligations of the homeowner that will be assumed by the

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equity purchaser.

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     d. The total consideration to be paid by the equity

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purchaser in connection with or incident to the acquisition of

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the property by the equity purchaser.

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     e. 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.

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     f. 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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     2. A foreclosure-rescue transaction agreement must contain,

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above the signature line, a statement in at least 12-point

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uppercase type that substantially complies with the following:

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I UNDERSTAND THAT UNDER THIS AGREEMENT I AM SELLING MY HOME

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TO THE OTHER UNDERSIGNED PARTY.

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     3. A foreclosure-rescue transaction agreement must state

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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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     4. A foreclosure-rescue transaction agreement must comply

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with all applicable provisions of 15 U.S.C. ss. 1600 et seq. and

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related regulations.

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     (b) The homeowner may cancel the foreclosure-rescue

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transaction agreement without penalty if the homeowner notifies

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the equity purchaser of such cancellation no later than 5 p.m. on

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the 3rd business day after signing the written agreement. Any

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moneys paid by the equity purchaser to the homeowner or by the

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homeowner to the equity purchaser must be returned at

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cancellation. The right to cancel does not limit or otherwise

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affect the homeowner's right to cancel the transaction under any

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other law. The right to cancel may not be waived by the homeowner

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or limited in any way by the equity purchaser. The equity

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purchaser must give the homeowner, at the time the written

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agreement is signed, a notice of the homeowner's right to cancel

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the foreclosure-rescue transaction as set forth in this

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subsection. The notice, which must be set forth on a separate

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cover sheet to the written agreement that contains no other

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written or pictorial material, must be in at least 12-point

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uppercase type, 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 INFORMATION REGARDING CANCELLATION RIGHTS.

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

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

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THIRD 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 PURCHASER.

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     ANY MONEY PAID DIRECTLY TO YOU BY THE PURCHASER MUST BE

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RETURNED TO THE PURCHASER AT CANCELLATION. ANY MONEY PAID BY YOU

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TO THE PURCHASER MUST BE RETURNED TO YOU AT 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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     (c) 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 with the equity purchaser,

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and this right to cure may be exercised on up to three separate

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

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written agreement required by this subsection.

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     (d) 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.

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     (e) 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 subsection, there is a rebuttable presumption that the

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homeowner has a reasonable ability to make the payments required

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to repurchase the property if the homeowner's monthly payments

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for primary housing expenses and regular monthly principal and

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interest payments on other personal debt do not exceed 60 percent

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of the homeowner's monthly gross income.

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     (f) 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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rebuttable presumption, solely between the equity purchaser and

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the homeowner, arises that the foreclosure-rescue transaction was

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unconscionable if the homeowner's repurchase price is greater

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than 17 percent per annum more than the total amount paid by the

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equity purchaser to acquire, improve, maintain, and hold the

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property. Unless the repurchase agreement or a memorandum of the

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repurchase agreement is recorded in accordance with s. 695.01,

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the presumption arising under this subsection shall not apply

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against creditors or subsequent purchasers for a valuable

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consideration and without notice.

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     (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, solely between the

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equity purchaser and the homeowner, that the transaction is a

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loan transaction and the conveyance from the homeowner to the

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equity purchaser is a mortgage under s. 697.01. Unless the lease

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option or other repurchase agreement, or a memorandum of the

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lease option or other repurchase agreement, is recorded in

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accordance with s. 695.01, the presumption created under this

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subsection shall not apply against creditors or subsequent

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purchasers for a valuable consideration and without notice.

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     (7) VIOLATIONS.--A person who violates any provision of

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this section commits an unfair and deceptive trade practice as

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defined in part II of this chapter. Violators are subject to the

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penalties and remedies provided in part II of this chapter,

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including a monetary penalty not to exceed $15,000 per violation.

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     Section 2. Section 501.2078, Florida Statutes, is repealed.

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     Section 3.  This act shall take effect October 1, 2008.