Miami Condo Foreclosure Rescue Fraud

Miami condo and home buyers, sellers and owners were recently given some protection and education when recent laws were passed by the Florida Legislature to help educate and inform Florida residents about fraudulent foreclosure rescue and avoidance schemes.  A recent article byJ. B. Davis of Attorneys Title Insurance Fund, Inc., describes, in part, the basics of the legislation as follows:

“Session Law Ch. 2008-79, HB 643, concerning foreclosure fraud and the regulation of mortgage rescue companies, was passed by the Florida Legislature creating Sec. 501.1377, F.S., which became effective Oct. 1, 2008. The newly created statute targets “foreclosure-rescue consultants” and “equity purchasers” in an attempt to protect homeowners who may be vulnerable to fraud, deception and unfair dealings as a result of being in default on their mortgages, in foreclosure or at risk of losing their homes. Sec. 501.1377(1), F.S. Under the statute, persons or entities engaging in foreclosure rescue schemes must now disclose the terms of the transaction in a written agreement and provide homeowners with the opportunity to cancel a conveyance of their home in advance of a closing.

At the outset, it may be helpful to recognize that the statutory scheme differentiates between “foreclosure-rescue consultants” and “equity purchasers.” Sec. 501.1377(2)(a) and (b), F.S. Foreclosure-rescue consultants provide services defined as “foreclosure-related rescue services” and the written agreement required to be provided is a “foreclosure-related rescue services agreement.” Sec. 501.1377(2)(c) and (4), F.S. An equity purchaser, on the other hand, seeks a conveyance of the homeowner’s subject property to the equity purchaser and the homeowner retains a legal or equitable interest in the property being conveyed. Such transaction is defined as a “foreclosure-rescue transaction” and the written agreement required to be provided to the homeowner is a “foreclosure-rescue transaction agreement.” Sec. 501.1377(2)(d) and (5), F.S. A foreclosure lis pendens must be of record in connection with a foreclosure-rescue transaction by an equity purchaser, but a foreclosure lis pendens may or may not be of record where a transaction involves a foreclosure-rescue consultant who provides foreclosure-related rescue services.“

Although the details of what is and what is not improper foreclosure rescue services may be unclear or otherwise difficult to fully understand, the important thing is to always get the appropriate WRITTEN agreement of the terms of service, and always get a second or even a third opinion from a Board Certified Real Estate Attorney and/or an experienced mortgage and lending law attorney.

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Be wary of any entity promising you that they can save your from foreclosure and take care of your upside down mortgage and repair your credit, especially when they demand substantial fees up front.

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