Foreclosure Defense: Confusion in Florida — Butterfly Ballot Approach to Legislation

FLORIDA GETS PECULIAR AGAIN:

It was about 40 years ago that a decision out of a Florida court or a statute passed by the Florida legislature was taken to mean nothing in terms of precedent or national law. After that they passed many laws and created many court decisions that served as models for the rest of the country. Here is a GIANT STEP BACKWARD:

The Republican dominated legislature now wishes to make it very difficult if not impossible for the homeowner/borrower to defend their foreclosure, to even hire a lawyer or other professional consultant, or otherwise defend their rights under the due process requirements of the U.S. Constitution and the Florida Constitution, by the way, with which I am very familiar. Using the naming convention perfected by politicians performing slight of hand tricks on the public, they attempt to make it it as though this will rescue someone in foreclosure. It doesn’t. It makes it harder for them and easier on the “lenders” who are not even lenders.

From Dawn Rapaport, Esq..: Ft. Lauderdale, June 30, 2008

Foreclosure Rescue Fraud Prevention Act of 2008 is the new law going in to effect.  I need to write about it in the next couple days but the most glaring issue is that is does not exclude lawyers, it precludes ANYONE from taking any money as a retainer or in advance in exchange for helping in foreclosure rescue.  We have to get to the legislature and to Governor Christ to stop this law from going in to effect as it stands now.

CHAPTER 2008-79

Council Substitute for House Bill No. 643

An act relating to foreclosure fraud; creating s. 501.1377, F.S.; providing

legislative findings and intent with respect to the need to protect

homeowners who enter into agreements designed to save their

homes from foreclosure; providing definitions; prohibiting a foreclosure-

rescue consultant from engaging in certain acts or failing to

perform contracted services; requiring that all agreements for foreclosure-

related rescue services and foreclosure-rescue transactions

be in writing; specifying information that must be in the written

agreement; requiring that certain statements in the written agreement

be in uppercase letters and of a specified size; providing that

the homeowner has a right to cancel the agreement for a specified

period and the right may not be waived; providing that the homeowner

has a specified period during which to cure a default under

certain circumstances; requiring equity purchasers to assume or

discharge certain liens; requiring that an equity purchaser verify

the homeowner’s ability to make payments under a repurchase

agreement; providing price limitations for repurchase transactions;

providing for a rebuttable presumption of certain transactions being

unconscionable under certain circumstances; providing for limited

application of the presumption; providing an exclusion; providing

that a foreclosure-rescue transaction involving a lease option or

other repurchase agreement creates a rebuttable presumption that

the transaction is a loan transaction and the conveyance from the

homeowner to the equity purchaser is a mortgage; providing limited

application of the presumption; providing an exclusion; providing

that a person who violates certain provisions commits an unfair and

deceptive trade practice as defined in part II of ch. 501, F.S.; providing

penalties; repealing s. 501.2078, F.S., relating to violations involving

individual homeowners during the course of residential foreclosure

proceedings; providing an effective date.

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

Section 1. Section 501.1377, Florida Statutes, is created to read:

501.1377 Violations involving homeowners during the course of residential

foreclosure proceedings.—

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

that homeowners who are in default on their mortgages, in foreclosure, or

at risk of losing their homes due to nonpayment of taxes may be vulnerable

to fraud, deception, and unfair dealings with foreclosure-rescue consultants

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

with information necessary to make an informed decision regarding the sale

or transfer of his or her home to an equity purchaser. It is the further intent

of this section to require that foreclosure-related rescue services agreements

be expressed in writing in order to safeguard homeowners against deceit and

financial hardship; to ensure, foster, and encourage fair dealing in the sale

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and purchase of homes in foreclosure or default; to prohibit representations

that tend to mislead; to prohibit or restrict unfair contract terms; to provide

a cooling-off period for homeowners who enter into contracts for services

related to saving their homes from foreclosure or preserving their rights to

possession of their homes; to afford homeowners a reasonable and meaningful

opportunity to rescind sales to equity purchasers; and to preserve and

protect home equity for the homeowners of this state.

(2) DEFINITIONS.—As used in this section, the term:

(a) “Equity purchaser” means any person who acquires a legal, equitable,

or beneficial ownership interest in any residential real property as a result

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

acquires the legal, equitable, or beneficial interest in such property:

1. By a certificate of title from a foreclosure sale conducted under chapter

45;

2. At a sale of property authorized by statute;

3. By order or judgment of any court;

4. From a spouse, parent, grandparent, child, grandchild, or sibling of the

person or the person’s spouse; or

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

plan, or any other agreement between a foreclosing lender and a homeowner.

(b) “Foreclosure-rescue consultant” means a person who directly or indirectly

makes a solicitation, representation, or offer to a homeowner to provide

or perform, in return for payment of money or other valuable consideration,

foreclosure-related rescue services. The term does not apply to:

1. A person excluded under s. 501.212.

2. A person acting under the express authority or written approval of the

United States Department of Housing and Urban Development or other

department or agency of the United States or this state to provide foreclosure-

related rescue services.

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

the United States Internal Revenue Service under s. 501(c)(3) of the Internal

Revenue Code, which offers counseling or advice to an owner of residential

real property in foreclosure or loan default if the agency or organization does

not contract for foreclosure-related rescue services with a for-profit lender

or person facilitating or engaging in foreclosure-rescue transactions.

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

residential real property in foreclosure if the person performs foreclosurerelated

rescue services in connection with this obligation or lien and the

obligation or lien was not the result of or part of a proposed foreclosure

reconveyance or foreclosure-rescue transaction.

Ch. 2008-79 LAWS OF FLORIDA Ch. 2008-79

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

subsidiary of the financial institution or of the parent or subsidiary.

6. A licensed mortgage broker, mortgage lender, or correspondent mortgage

lender that provides mortgage counseling or advice regarding residential

real property in foreclosure, which counseling or advice is within the

scope of services set forth in chapter 494 and is provided without payment

of money or other consideration other than a mortgage brokerage fee as

defined in s. 494.001.

(c) “Foreclosure-related rescue services” means any good or service related

to, or promising assistance in connection with:

1. Stopping, avoiding, or delaying foreclosure proceedings concerning

residential real property; or

2. Curing or otherwise addressing a default or failure to timely pay with

respect to a residential mortgage loan obligation.

(d) “Foreclosure-rescue transaction” means a transaction:

1. By which residential real property in foreclosure is conveyed to an

equity purchaser and the homeowner maintains a legal or equitable interest

in the residential real property conveyed, including, without limitation, a

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

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

and

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

foreclosure proceedings against a homeowner’s residential real property.

(e) “Homeowner” means any record title owner of residential real property

that is the subject of foreclosure proceedings.

(f) “Residential real property” means real property consisting of onefamily

to four-family dwelling units, one of which is occupied by the owner

as his or her principal place of residence.

(g) “Residential real property in foreclosure” means residential real property

against which there is an outstanding notice of the pendency of foreclosure

proceedings recorded pursuant to s. 48.23.

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

related rescue services, a foreclosure-rescue consultant may not:

(a) Engage in or initiate foreclosure-related rescue services without first

executing a written agreement with the homeowner for foreclosure-related

rescue services; or

(b) Solicit, charge, receive, or attempt to collect or secure payment, directly

or indirectly, for foreclosure-related rescue services before completing

or performing all services contained in the agreement for foreclosure-related

rescue services.

Ch. 2008-79 LAWS OF FLORIDA Ch. 2008-79

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(4) FORECLOSURE-RELATED RESCUE SERVICES; WRITTEN

AGREEMENT.—

(a) The written agreement for foreclosure-related rescue services must be

printed in at least 12-point uppercase type and signed by both parties. The

agreement must include the name and address of the person providing

foreclosure-related rescue services, the exact nature and specific detail of

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

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

of the agreement may not be earlier than the date the homeowner signed the

agreement. The foreclosure-rescue consultant must give the homeowner a

copy of the agreement to review not less than 1 business day before the

homeowner is to sign the agreement.

(b) The homeowner has the right to cancel the written agreement without

any penalty or obligation if the homeowner cancels the agreement within

3 business days after signing the written agreement. The right to cancel may

not be waived by the homeowner or limited in any manner by the foreclosure-

rescue consultant. If the homeowner cancels the agreement, any payments

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

returned to the homeowner within 10 business days after receipt of the

notice of cancellation.

(c) An agreement for foreclosure-related rescue services must contain,

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

type that substantially complies with the following:

HOMEOWNER’S RIGHT OF CANCELLATION

YOU MAY CANCEL THIS AGREEMENT FOR FORECLOSURERELATED

RESCUE SERVICES WITHOUT ANY PENALTY OR OBLIGATION

WITHIN 3 BUSINESS DAYS FOLLOWING THE DATE THIS

AGREEMENT IS SIGNED BY YOU.

THE FORECLOSURE-RESCUE CONSULTANT IS PROHIBITED BY

LAW FROM ACCEPTING ANY MONEY, PROPERTY, OR OTHER FORM

OF PAYMENT FROM YOU UNTIL ALL PROMISED SERVICES ARE

COMPLETE. IF FOR ANY REASON YOU HAVE PAID THE CONSULTANT

BEFORE CANCELLATION, YOUR PAYMENT MUST BE RETURNED

TO YOU NO LATER THAN 10 BUSINESS DAYS AFTER THE

CONSULTANT RECEIVES YOUR CANCELLATION NOTICE.

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

STATEMENT THAT YOU ARE CANCELLING THE AGREEMENT

SHOULD BE MAILED (POSTMARKED) OR DELIVERED TO ……..

(NAME) AT …….. (ADDRESS) NO LATER THAN MIDNIGHT OF ……..

(DATE).

IMPORTANT: IT IS RECOMMENDED THAT YOU CONTACT YOUR

LENDER OR MORTGAGE SERVICER BEFORE SIGNING THIS AGREEMENT.

YOUR LENDER OR MORTGAGE SERVICER MAY BE WILLING

TO NEGOTIATE A PAYMENT PLAN OR A RESTRUCTURING WITH

YOU FREE OF CHARGE.

Ch. 2008-79 LAWS OF FLORIDA Ch. 2008-79

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(d) The inclusion of the statement does not prohibit the foreclosure rescue

consultant from giving the homeowner more time in which to cancel

the agreement than is set forth in the statement, provided all other requirements

of this subsection are met.

(e) The foreclosure-rescue consultant must give the homeowner a copy of

the signed agreement within 3 hours after the homeowner signs the agreement.

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

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

prepared in at least 12-point uppercase type that is completed, signed, and

dated by the homeowner and the equity purchaser before executing any

instrument from the homeowner to the equity purchaser quitclaiming, assigning,

transferring, conveying, or encumbering an interest in the residential

real property in foreclosure. The equity purchaser must give the homeowner

a copy of the completed agreement within 3 hours after the homeowner

signs the agreement. The agreement must contain the entire understanding

of the parties and must include:

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

b. The street address and full legal description of the property.

c. Clear and conspicuous disclosure of any financial or legal obligations

of the homeowner that will be assumed by the equity purchaser.

d. The total consideration to be paid by the equity purchaser in connection

with or incident to the acquisition of the property by the equity purchaser.

e. The terms of payment or other consideration, including, but not limited

to, any services that the equity purchaser represents will be performed

for the homeowner before or after the sale.

f. The date and time when possession of the property is to be transferred

to the equity purchaser.

2. A foreclosure-rescue transaction agreement must contain, above the

signature line, a statement in at least 12-point uppercase type that substantially

complies with the following:

I UNDERSTAND THAT UNDER THIS AGREEMENT I AM SELLING

MY HOME TO THE OTHER UNDERSIGNED PARTY.

3. A foreclosure-rescue transaction agreement must state the specifications

of any option or right to repurchase the residential real property in

foreclosure, including the specific amounts of any escrow payments or deposit,

down payment, purchase price, closing costs, commissions, or other

fees or costs.

Ch. 2008-79 LAWS OF FLORIDA Ch. 2008-79

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4. A foreclosure-rescue transaction agreement must comply with all applicable

provisions of 15 U.S.C. ss. 1600 et seq. and related regulations.

(b) The homeowner may cancel the foreclosure-rescue transaction agreement

without penalty if the homeowner notifies the equity purchaser of such

cancellation no later than 5 p.m. on the 3rd business day after signing the

written agreement. Any moneys paid by the equity purchaser to the homeowner

or by the homeowner to the equity purchaser must be returned at

cancellation. The right to cancel does not limit or otherwise affect the homeowner’s

right to cancel the transaction under any other law. The right to

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

equity purchaser. The equity purchaser must give the homeowner, at the

time the written agreement is signed, a notice of the homeowner’s right to

cancel the foreclosure-rescue transaction as set forth in this subsection. The

notice, which must be set forth on a separate cover sheet to the written

agreement that contains no other written or pictorial material, must be in

at least 12-point uppercase type, double-spaced, and read as follows:

NOTICE TO THE HOMEOWNER/SELLER

PLEASE READ THIS FORM COMPLETELY AND CAREFULLY. IT

CONTAINS VALUABLE INFORMATION REGARDING CANCELLATION

RIGHTS.

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

YOU MAY CANCEL THIS TRANSACTION AT ANY TIME BEFORE 5:00

P.M. OF THE THIRD BUSINESS DAY FOLLOWING RECEIPT OF THIS

NOTICE.

THIS CANCELLATION RIGHT MAY NOT BE WAIVED IN ANY MANNER

BY YOU OR BY THE PURCHASER.

ANY MONEY PAID DIRECTLY TO YOU BY THE PURCHASER MUST

BE RETURNED TO THE PURCHASER AT CANCELLATION. ANY

MONEY PAID BY YOU TO THE PURCHASER MUST BE RETURNED TO

YOU AT CANCELLATION.

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

BY 5:00 P.M. ON …….. (DATE) AT …….. (ADDRESS). IT IS BEST

TO MAIL IT BY CERTIFIED MAIL OR OVERNIGHT DELIVERY, RETURN

RECEIPT REQUESTED, AND TO KEEP A PHOTOCOPY OF THE

SIGNED FORM AND YOUR POST OFFICE RECEIPT.

I (we) hereby cancel this transaction.

Seller’s Signature

Printed Name of Seller

Seller’s Signature

Printed Name of Seller

Date

(c) In any foreclosure-rescue transaction in which the homeowner is provided

the right to repurchase the residential real property, the homeowner

has a 30-day right to cure any default of the terms of the contract with the

equity purchaser, and this right to cure may be exercised on up to three

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

written agreement required by this subsection.

Ch. 2008-79 LAWS OF FLORIDA Ch. 2008-79

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(d) In any foreclosure-rescue transaction, before or at the time of conveyance,

the equity purchaser must fully assume or discharge any lien in foreclosure

as well as any prior liens that will not be extinguished by the

foreclosure.

(e) If the homeowner has the right to repurchase the residential real

property, the equity purchaser must verify and be able to demonstrate that

the homeowner has or will have a reasonable ability to make the required

payments to exercise the option to repurchase under the written agreement.

For purposes of this subsection, there is a rebuttable presumption that the

homeowner has a reasonable ability to make the payments required to

repurchase the property if the homeowner’s monthly payments for primary

housing expenses and regular monthly principal and interest payments on

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

gross income.

(f) If the homeowner has the right to repurchase the residential real

property, the price the homeowner pays may not be unconscionable, unfair,

or commercially unreasonable. A rebuttable presumption, solely between

the equity purchaser and the homeowner, arises that the foreclosure-rescue

transaction was unconscionable if the homeowner’s repurchase price is

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

equity purchaser to acquire, improve, maintain, and hold the property. Unless

the repurchase agreement or a memorandum of the repurchase agreement

is recorded in accordance with s. 695.01, the presumption arising

under this subsection shall not apply against creditors or subsequent purchasers

for a valuable consideration and without notice.

(6) REBUTTABLE PRESUMPTION.—Any foreclosure-rescue transaction

involving a lease option or other repurchase agreement creates a rebuttable

presumption, solely between the equity purchaser and the homeowner,

that the transaction is a loan transaction and the conveyance from the

homeowner to the equity purchaser is a mortgage under s. 697.01. Unless

the lease option or other repurchase agreement, or a memorandum of the

lease option or other repurchase agreement, is recorded in accordance with

s. 695.01, the presumption created under this subsection shall not apply

against creditors or subsequent purchasers for a valuable consideration and

without notice.

(7) VIOLATIONS.—A person who violates any provision of this section

commits an unfair and deceptive trade practice as defined in part II of this

chapter. Violators are subject to the penalties and remedies provided in part

II of this chapter, including a monetary penalty not to exceed $15,000 per

violation.

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

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

Approved by the Governor May 28, 2008.

Filed in Office Secretary of State May 28, 2008.

Ch. 2008-79 LAWS OF FLORIDA Ch. 2008-79

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Dawn M. Rapoport, Esq.
Dawn M. Rapoport, P.A.
1314 East Las Olas Blvd. # 121
Fort Lauderdale, FL 33301
Ph: 754-235-7635
Fax: 954-337-3759

5 Responses

  1. Where can I get a copy of the documents filed by Jose?
    Or, the court and case title and number?

  2. Just wanted you all to know that the new law that just took effect in Florida exempts lawyers as per a written opinion by Florida State Attorney General Bill McCollum. However, please be aware that ANY other profession charging fees in advance of work should be reviewed to see if they are in compliance with this law in Mortgage Rescue Fraud Act. the Attorney General’s office is in charge of compliance with this law and people vicitimized by mortgage rescuers should report them to the state.

  3. It is really unfortunate that you feel this way, as you may be aware there are attorneys that may have gone to school and may even be practicing for years, but that does not necessarily mean they are good attorneys nor that they are qualified to even render a legal opinion. I have personally interviewed 107 attorneys in the Northern Virginia area, this fact does not take away from the issue that there are many brilliant and qualified attorneys that may be able to help you and they may have to charge for their time and effort. I have a TOXIC loan in my home and it has been very tough, but My family and I have been pushing forward no matter what, an unwilling and unqualified attorney is not going to turn me away from asserting my rights. This website is a godsend, it is not supposed to perform miracles it is there for the purpose of providing information.

    You may have to personally educate yourself and help your attorney to get up to speed on the issues raised in this website. I also believe you missed the point about free and clear title on your home. This is a battle and at the end in the final tally, the settlement may include the satisfaction of the note, as strange as it may seem for some attorneys, it is possible and after all the fraud that was committed against the borrowers and investors getting clear title might be part of the remedy.

    Do not take me wrong, the ones who asked you for money are Florida lawyers, your search for answers and information took you to this site, but the fight is local.

    It may have to cost money to get justice, the lenders and crooks are going to pay top flight lawyers, you need to do a full search for the great lawyer you need.

    I understand that many people are having a tough financial situation, but this is your home your are writing about, if your home is not worth to invest in a good lawyer, then why bother looking for information.

    Go Livinglies, Go !

    The USA need more attorneys like yourselves.

    Keep up the good fight!

    By the way I stopped the lender in Bankruptcy Court, they were trying to get a motion to lift the stay approved, and with all the information I gathered from this site and a Mortgage Audit, I stopped them cold, they did not have the NOTE and were not prepared to face a borrower not willing to bend over and walk away, a couple of attorneys sitting in the court house came up to me and asked me how I was able to put my response to the motion from the lender based on TILA, RESPA, and other laws these lenders broke at will and without regard to the consequences. I have rescinded on both my loans and we are preparing to file an adversarial complaint to quiet title and to sue for damages.

    Good luck in your search of a good attorney!

    I bid you success!

    I will forward this info to Mr. Garfield as soon as I can.

    Thanks again!

  4. It looks like AG Bill McCollum has taken a very elegant and powerful measure to fix the problem. His office never intended for this law to restrict homeowners’ access to legal counsel and his letter not only makes his position clear, it appears to effectuate an exemption through the avenue of 501.1377 (2) (b) 2.

  5. It would appear that there is no exclusion for attorneys representing homeowners. Does this mean that we can’t charge them until afterward? What about your right to representation?

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