Pensioners Will Feel the Pinch from Illegal Mortgages and Foreclosures

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Editor’s Comment:

There are many people whose opinion produces the resistance of government to rip up the banks that got us into this economic mess. They all say government is too big, that we already have too much regulation and that Obama is the cause of the recession. Their opinions are based largely on the fact that they perceive the borrowers as deadbeats and government assistance as another “handout.” 

But when it comes down to it, it’s easy to make a decision based upn ideology if the consequences are not falling on you. Read any news source and you will see that the pension funds are taking a huge hit as a rsult of illegal bank activities and fraudulent practices leaving the victims and our economy in a lurch.

The article below is about public pensions where the pension funds and the governmental units took a monumental hit when the banks sucked the life out of our economy. TRANSLATION: IF YOU DEPEND UPON PENSION INCOME YOU ARE LIKELY TO FIND OUT YOU ARE SCREWED. And even if you don’t depend upon pension income, you are likely to be taxed for the shortfall that is now sitting in the pockets of Wall Street Bankers.

Think about it. If the Banks were hit hard like they were in Iceland andother places (and where by the way they still exist and make money) then your pension fund would not have the loss that requires either more taxes or less benefits. And going after the banks doesn’t take a dime out of pulic funds which should (but doesn’t) make responsible people advocating austerity measures rejoice. They still say they don’t like the obvious plan of getting restitution from thieves because the theives are paying them and feeding them talking points. And some of us are listening. Are you?

Public Pensions Faulted for Bets on Rosy Returns

By: Mary Williams Walsh and Danny Hakim

Few investors are more bullish these days than public pension funds. While Americans are typically earning less than 1 percent interest on their savings accounts and watching their 401(k) balances yo-yo along with the stock market, most public pension funds are still betting they will earn annual returns of 7 to 8 percent over the long haul, a practice that Mayor Michael R. Bloomberg recently called “indefensible.”

Now public pension funds across the country are facing a painful reckoning. Their projections look increasingly out of touch in today’s low-interest environment, and pressure is mounting to be more realistic. But lowering their investment assumptions, even slightly, means turning for more cash to local taxpayers — who pay part of the cost of public pensions through property and other taxes.

In New York, the city’s chief actuary, Robert North, has proposed lowering the assumed rate of return for the city’s five pension funds to 7 percent from 8 percent, which would be one of the sharpest reductions by a public pension fund in the United States. But that change would mean finding an additional $1.9 billion for the pension system every year, a huge amount for a city already depositing more than a tenth of its budget — $7.3 billion a year — into the funds.

But to many observers, even 7 percent is too high in today’s market conditions.

“The actuary is supposedly going to lower the assumed reinvestment rate from an absolutely hysterical, laughable 8 percent to a totally indefensible 7 or 7.5 percent,” Mr. Bloomberg said during a trip to Albany in late February. “If I can give you one piece of financial advice: If somebody offers you a guaranteed 7 percent on your money for the rest of your life, you take it and just make sure the guy’s name is not Madoff.” Public retirement systems from Alaska to Maine are running into the same dilemma as they struggle to lower their assumed rates of return in light of very low interest rates and unpredictable stock prices.

They are facing opposition from public-sector unions, which fear that increased pension costs to taxpayers will further feed the push to cut retirement benefits for public workers. In New York, the Legislature this year cut pensions for public workers who are hired in the future, and around the country governors and mayors are citing high pension costs as a reason for requiring workers to contribute more, or work longer, to earn retirement benefits.

In addition to lowering the projected rate of return, Mr. North has also recommended that the New York City trustees acknowledge that city workers are living longer and reporting more disabilities — changes that would cost the city an additional $2.8 billion in pension contributions this year. Mr. North has called for the city to soften the blow to the budget by pushing much of the increased pension cost into the future, by spreading the increased liability out over 22 years. Ailing pension systems have been among the factors that have recently driven struggling cities into Chapter 9 bankruptcy. Such bankruptcies are rare, but economists warn that more are likely in the coming years. Faulty assumptions can mask problems, and municipal pension funds are often so big that if they run into a crisis their home cities cannot afford to bail them out. The typical public pension plan assumes its investments will earn average annual returns of 8 percent over the long term, according to the Center for Retirement Research at Boston College. Actual experience since 2000 has been much less, 5.7 percent over the last 10 years, according to the National Association of State Retirement Administrators. (New York State announced last week that it had earned 5.96 percent last year, compared with the 7.5 percent it had projected.)

Worse, many economists say, is that states and cities have special accounting rules that have been criticized for greatly understating pension costs. Governments do not just use their investment assumptions to project future asset growth. They also use them to measure what they will owe retirees in the future in today’s dollars, something companies have not been permitted to do since 1993.

As a result, companies now use an average interest rate of 4.8 percent to calculate their pension costs in today’s dollars, according to Milliman, an actuarial firm.

In New York City, the proposed 7 percent rate faces resistance from union trustees who sit on the funds’ boards. The trustees have the power to make the change; their decision must also be approved by the State Legislature.

“The continued risk here is that even 7 is too high,” said Edmund J. McMahon, a senior fellow at the Empire Center for New York State Policy, a research group for fiscal issues.

And Jeremy Gold, an actuary and economist who has been an outspoken critic of public pension disclosures, said, “If you’re using 7 percent in a 3 percent world, then you’re still continuing to borrow from the pension fund.” The city’s union leaders disagree. Harry Nespoli, the chairman of the Municipal Labor Committee, the umbrella group for the city’s public employee unions, said that lowering the rate to 7 percent was unnecessary.

“They don’t have to turn around and lower it a whole point,” he said.

When asked if his union was more bullish on the markets than the city’s actuary, Mr. Nespoli said, “All we can do is what the actuary is doing. He’s guessing. We’re guessing.”

Vermont has lowered its rate by 2 percentage points, but for only one year. The state recently adopted an unusual new approach calling for a sharp initial reduction in its investment assumptions, followed by gradual yearly increases. Vermont has also required public workers to pay more into the pension system.

Union leaders see hidden agendas behind the rising calls for lower pension assumptions. When Rhode Island’s state treasurer, Gina M. Raimondo, persuaded her state’s pension board to lower its rate to 7.5 percent last year, from 8.25 percent, the president of a firemen’s union accused her of “cooking the books.”

Lowering the rate to 7.5 percent meant Rhode Island’s taxpayers would have to contribute an additional $300 million to the fund in the first year, and more after that. Lawmakers were convinced that the state could not afford that, and instead reduced public pension benefits, including the yearly cost-of-living adjustments that retirees now receive. State officials expect the unions to sue over the benefits cuts.

When the mayor of San Jose, Calif., Chuck Reed, warned that the city’s reliance on 7.5 percent returns was too risky, three public employees’ unions filed a complaint against him and the city with the Securities and Exchange Commission. They told the regulators that San Jose had not included such warnings in its bond prospectus, and asked the regulators to look into whether the omission amounted to securities fraud. A spokesman for the mayor said the complaint was without merit. In Sacramento this year, Alan Milligan, the actuary for the California Public Employees’ Retirement System, or Calpers, recommended that the trustees lower their assumption to 7.25 percent from 7.75 percent. Last year, the trustees rejected Mr. Milligan’s previous proposal, to lower the rate to 7.5 percent.

This time, one trustee, Dan Dunmoyer, asked the actuary if he had calculated the probability that the pension fund could even hit those targets.

Yes, Mr. Milligan said: There was a 50-50 chance of getting 7.5 percent returns, on average, over the next two decades. The odds of hitting a 7.25 percent target were a little better, he added, 54 to 46.

Mr. Dunmoyer, who represents the insurance industry on the board, sounded shocked. “To me, as a fiduciary, you want to have more than a 50 percent chance of success.”

If Calpers kept setting high targets and missing them, “the impact on the counties won’t be bigger numbers,” he said. “It will be bankruptcy.”

In the end, a majority decided it was worth the risk, and voted against Mr. Dunmoyer, lowering the rate to 7.5 percent.


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

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