New Florida Law Protects Against Mortgage Fraud

25 June 2008

Author: admin Posted under Mortgage

For the month of May, Florida posted the 4th highest foreclosure rate in the nation, with one out of 228 homes entering some stage of foreclosure. Considering this, it is not surprising that the local government is doing everything in its power to stem the rising tide o foreclosure.

New Florida Law Protects Against Mortgage Fraud

In addition to holding foreclosure workshops and seminars, state legislators have decided to pass a new law that protects troubled homeowners from fraudulent scams. The new law named Foreclosure Rescue Fraud Prevention Act of 2008 will take effect on October 1.

Since there is an alarming increase in fraud-related foreclosure, the new law will be able to address this concern by requiring foreclosure rescue consultant to be present in the proceeding. The consultant will act as mediator as well and help the homeowner work out a repayment plan with their lender.

Every detail of the mediation process will be recorded and included in a written agreement, which will be signed by the homeowner. If the homeowner decides to cancel the agreement, he will be allowed to do so as indicated in the contract. But this is only possible after a 5-day cooling off period.

These foreclosure consultants are also not allowed to take any form of payment until the entire process is completed. This will ensure that the homeowner will receive the proper assistance in order to address their mortgage problems.

Coincidentally, the number of foreclosure rescue scams reported in the past two years has increased by almost 600 percent as the inventory of foreclosure homes continue to grow.

Troubled homeowners are targeted by bogus foreclosure companies. The scams usually involved offers of stopping foreclosure by transferring title, shouldering mortgage payments while homeowners become renters and sometimes, even bankruptcy assistance.

Many state officials have campaigned against these foreclosure scams especially as they are becoming more and more rampant in areas hit hardest by the foreclosure crisis.