To protect homeowners in financial difficulty from losing their homes to foreclosure rescue scams, the Florida legislature enacted the Foreclosure Rescue Fraud Prevention Act. This law imposes tight restrictions on anyone offering services purporting to help you save your residential property from foreclosure.
(To learn more about foreclosure procedures in Florida, visit our Florida Foreclosure Law Center.)
Foreclosure rescue services include any goods or services related to, or promising to assist you, with:
A foreclosure rescue transaction includes any transaction:
Not included. A foreclosure rescue transaction does not include transfers resulting from:
In recent years, foreclosure rescue scams have flourished. To learn more about common foreclosure rescue scams, and how to avoid them, visit out Foreclosure Rescue Scams topic area.
The law applies to any person or business that solicits, represents, or offers to provide you with foreclosure rescue services or engage in a foreclosure rescue transaction in Florida in exchange for money or other valuable consideration, unless they are specifically excluded under the law.
Not included. The following persons and businesses are excluded from coverage under the Florida Foreclosure Rescue Fraud Prevention Act:
The law protects you if you own residential real property from a one family home up to a four-family dwelling. This includes single family homes, townhouses, condominiums, duplexes, triplexes, and fourplexes.
Agreements for foreclosure rescue services must be in writing and signed by both parties. The agreement must include:
You must be provided with an exact copy of the fully executed (signed by both parties) contract within three hours of the time you signed it.
You have the right to cancel an agreement for foreclosure rescue services without penalty or obligation within three business days from the date you signed the agreement. The right to cancel cannot be waived or limited in any way and, if you cancel, any money you paid must be refunded to you within ten business days of the receipt of the cancellation.
If the agreement gives you the right to repurchase the property, the repurchase price must be reasonable and the purchaser must verify and demonstrate that you have the reasonable ability to make any required payments and pay the repurchase price.
Generally, this means the purchaser will need to show that your monthly payments for housing expenses and other debt do not exceed 60% of your monthly income before taxes, and that the repurchase price is not more than the amount the purchaser paid to acquire and maintain the property plus seventeen percent per year.
If you default under the foreclosure rescue agreement, you have thirty days to cure the default and reinstate the agreement, and you can exercise this right up to three times during the term of the agreement.
At the sale, the purchaser is required by law to assume or satisfy (pay) the lien that is the subject of the foreclosure as well as any other liens that would not be extinguished by the foreclosure.
Under the law, you cannot be charged a fee, nor can the foreclosure rescuer solicit, receive, attempt to collect or secure payment in any way before completing or performing all services set forth in the written agreement.
Any violation of the Foreclosure Rescue Fraud Prevention Act is an unfair and deceptive trade practice under Florida law. Violators are subject to penalties and remedies including a monetary penalty of up to $15,000 per violation.