Get Shorty: FL Senate Zaps Short Sale Transactions

Florida Senate moves to heavily restrict short sales and foreclosure rescues.

Senate 0992: Relating to Foreclosure Fraud [EPCC]
Florida Senate - 2008 CS for CS for SB 992
By the Committees on Judiciary; Banking and Insurance; and Senators Fasano, Gaetz and Atwater

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;

Prohibiting a foreclosure-rescue consultant from being paid by the homeowner until full performance of contracted services;

Requiring that all agreements for foreclosure-related rescue services and foreclosure-rescue transactions be in writing and provided one day before the homeowner may sign with a 3 day right of recission and full refund within 10 days. If the agreement give the homeowner the right to repurchase their property, the homeowner shall have 30 days to cure any default. The homeowner is entitled to 3 attempts to cure defaults.

Requiring equity purchasers to assume or discharge all liens;

Requiring that an equity purchaser verify the homeowner's ability to make payments under a repurchase agreement; that the payments do not exceed 60% of the homeowners monthly gross income.

Providing 17% per annum price limitations for repurchase transactions;

Providing that a foreclosure-rescue transaction involving a lease option or other repurchase agreement is a loan transaction and the conveyance from the homeowner to the equity purchaser is a mortgage unless it is recorded.

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 up to $15,000.00.

History
04/30/08 SENATE Placed on Special Order Calendar; Substituted CS/HB 643 -SJ 01080; Laid on Table, Link/Iden/Sim/Compare passed, refer to CS/HB 643 -SJ 01080