Often before homeowners realize they are in foreclosure, pamphlets, letters and phone calls start streaming in from businesses offering to save their property from the clutches of the bank.
Frequently, though, so-called foreclosure rescue services are ruses to take money from people who can scarcely afford it. Sometimes they are conned into signing away their homes.
In an effort to regulate such firms and protect the growing number of people in foreclosure, the state Senate approved a foreclosure fraud bill Thursday, reining in the burgeoning field of consultants and equity purchasers, sometimes known as equity strippers or skimmers. Some have been accused of taking advantage of vulnerable homeowners.
Sen. Mike Fasano, R-New Port Richey, one of the bill's sponsors, said the legislation would help bring transparency to foreclosure rescue businesses. HB 643 passed the House earlier this session and will now head to the governor's desk for signing.
The bill requires foreclosure rescue companies to provide ample disclosures in contracts, making clear what the homeowner is doing and their rights. Homeowners would get three days to back out of any contract.
Foreclosure consultants, who often take money in exchange for help dealing with lenders, would be banned from accepting payment before promised services are performed. The measure responds to a growing wave of incidents in which consultants take money and do little if anything to help homeowners.
The bill also enhances consumer protections and civil remedies for homeowners who have been swindled.
