Bill Text: FL S0636 | 2012 | Regular Session | Introduced
Bill Title: Loan Modification Services
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2012-03-09 - Died in Banking and Insurance [S0636 Detail]
Download: Florida-2012-S0636-Introduced.html
Florida Senate - 2012 SB 636 By Senator Norman 12-00322-12 2012636__ 1 A bill to be entitled 2 An act relating to loan modification services; 3 amending s. 494.00296, F.S.; prohibiting entities 4 providing loan modification services from encouraging 5 borrowers to cease making their mortgage payments 6 under certain circumstances; providing a criminal 7 penalty and fine for violations of the loan 8 modification prohibitions; providing an effective 9 date. 10 11 Be It Enacted by the Legislature of the State of Florida: 12 13 Section 1. Section 494.00296, Florida Statutes, is amended 14 to read: 15 494.00296 Loan modification.— 16 (1) PROHIBITED ACTS.—When offering or providing loan 17 modification services, a loan originator, mortgage broker, or 18 mortgage lender may not: 19 (a) Suggest, recommend, or direct the borrower, orally or 20 by written agreement, to cease making payment on any loans as a 21 strategy for obtaining loan modifications from the lender 22 without fully informing the borrower of the risks and 23 consequences of such strategy; 24 (b)(a)Engage in or initiate loan modification services 25 without first executing a written agreement for loan 26 modification services with the borrower; 27 (c)(b)Execute a loan modification without the consent of 28 the borrower after the borrower is made aware of each modified 29 term; or 30 (d)(c)Solicit, charge, receive, or attempt to collect or 31 secure payment, directly or indirectly, for loan modification 32 services before completing or performing all services included 33 in the agreement for loan modification services. A fee may be 34 charged only if the loan modification results in a material 35 benefit to the borrower. The commission may adopt rules to 36 provide guidance on what constitutes a material benefit to the 37 borrower. 38 (2) LOAN MODIFICATION AGREEMENT.— 39 (a) The written agreement for loan modification services 40 must be printed in at least 12-point uppercase type and signed 41 by both parties. The agreement must include the name and address 42 of the person providing loan modification services, the exact 43 nature and specific detail of each service to be provided, the 44 total amount and terms of charges to be paid by the borrower for 45 the services, and the date of the agreement. The date of the 46 agreement may not be earlier than the date the borrower signed 47 the agreement. The mortgage broker or mortgage lender must give 48 the borrower a copy of the agreement to review at least 1 49 business day before the borrower is to sign the agreement. 50 (b) The borrower has the right to cancel the written 51 agreement without any penalty or obligation if the borrower 52 cancels the agreement within 3 business days after signing the 53 agreement. The right to cancel may not be waived by the borrower 54 or limited in any manner by the loan originator, mortgage 55 broker, or mortgage lender. If the borrower cancels the 56 agreement, any payments made must be returned to the borrower 57 within 10 business days after receipt of the notice of 58 cancellation. 59 (c) An agreement for loan modification services must 60 contain, immediately above the signature line, a statement in at 61 least 12-point uppercase type which substantially complies with 62 the following: 63 64 BORROWER’S RIGHT OF CANCELLATION 65 66 YOU MAY CANCEL THIS AGREEMENT FOR LOAN MODIFICATION 67 SERVICES WITHOUT ANY PENALTY OR OBLIGATION WITHIN 3 BUSINESS 68 DAYS AFTER THE DATE THIS AGREEMENT IS SIGNED BY YOU. 69 THE LOAN ORIGINATOR, MORTGAGE BROKER, OR MORTGAGE LENDER IS 70 PROHIBITED BY LAW FROM ACCEPTING ANY MONEY, PROPERTY, OR OTHER 71 FORM OF PAYMENT FROM YOU UNTIL ALL PROMISED SERVICES HAVE BEEN 72 COMPLETED. IF FOR ANY REASON YOU HAVE PAID THE CONSULTANT BEFORE 73 CANCELLATION, YOUR PAYMENT MUST BE RETURNED TO YOU WITHIN 10 74 BUSINESS DAYS AFTER THE CONSULTANT RECEIVES YOUR CANCELLATION 75 NOTICE. 76 PLEASE NOTE THAT ANY LOAN MODIFICATION STRATEGY THAT 77 ENCOURAGES YOU TO NOT MAKE YOUR MORTGAGE PAYMENTS MAY RESULT IN 78 YOUR LOSING YOUR PROPERTY AND DAMAGING YOUR CREDIT RATING. 79 TO CANCEL THIS AGREEMENT, A SIGNED AND DATED COPY OF A 80 STATEMENT THAT YOU ARE CANCELING THE AGREEMENT SHOULD BE MAILED 81 (POSTMARKED) OR DELIVERED TO ...(NAME)... AT ...(ADDRESS)... NO 82 LATER THAN MIDNIGHT OF ...(DATE).... 83 IMPORTANT: IT IS RECOMMENDED THAT YOU CONTACT YOUR MORTGAGE 84 LENDER OR MORTGAGE SERVICER BEFORE SIGNING THIS AGREEMENT. YOUR 85 LENDER OR SERVICER MAY BE WILLING TO NEGOTIATE A PAYMENT PLAN OR 86 A RESTRUCTURING WITH YOU FREE OF CHARGE. 87 88 (d) The inclusion of the statement does not prohibit a loan 89 originator, mortgage broker, or mortgage lender from giving the 90 homeowner more time to cancel the agreement than is set forth in 91 the statement if all other requirements of this subsection are 92 met. 93 (e) The person offering or providing the loan modification 94 services must give the borrower a copy of the signed agreement 95 within 3 hours after the borrower signs the agreement. 96 (3) REMEDIES.— 97 (a) Any person who knowingly violates any provision of 98 subsection (1) commits a felony of the third degree, punishable 99 as provided under s. 775.082, s. 775.083, or s. 775.084, and is 100 subject to a fine of up to $10,000 per violation. 101 (b)(a)Without regard to any other remedy or relief to 102 which a person is entitled, anyone aggrieved by a violation of 103 this section may bring an action to obtain a declaratory 104 judgment that an act or practice violates this section and to 105 enjoin a person who has violated, is violating, or is otherwise 106 likely to violate this section. 107 (c)(b)In any action brought by a person who has suffered a 108 loss as a result of a violation of this section, such person may 109 recover actual damages, plus attorneyattorney’sfees and court 110 costs, as follows: 111 1. In any action brought under this section, upon motion of 112 the party against whom such action is filed alleging that the 113 action is frivolous, without legal or factual merit, or brought 114 for the purpose of harassment, the court may, after hearing 115 evidence as to the necessity therefor, require the party 116 instituting the action to post a bond in the amount that the 117 court finds reasonable to indemnify the defendant for any 118 damages incurred, including reasonable attorneyattorney’sfees. 119 2. In any civil litigation resulting from an act or 120 practice involving a violation of this section, the prevailing 121 party, after judgment in the trial court and exhaustion of all 122 appeals, if any, may receive reasonable attorneyattorney’sfees 123 and costs from the nonprevailing party. 124 3. The attorney for the prevailing party shall submit a 125 sworn affidavit of time spent on the case and costs incurred for 126 all the motions, hearings, and appeals to the trial judge who 127 presided over the civil case. 128 4. The trial judge may award the prevailing party the sum 129 of reasonable costs incurred in the action plus a reasonable 130 legal fee for the hours actually spent on the case as sworn to 131 in an affidavit. 132 5. Any award of attorneyattorney’sfees or costs becomes 133 part of the judgment and is subject to execution as the law 134 allows. 135 (d)(c)The provisions of this subsection do not apply to 136 any action initiated by the enforcing authority. 137 Section 2. This act shall take effect July 1, 2012.