December, 2009:

Florida’s “Foreclosure Rescue” scams face new rules in 2010


Florida’s foreclosure rescue scams face new spotlight in 2010 rules
By James Thorner <> , Times Staff Writer
In Print: Friday, December 18, 2009
Too many Florida foreclosure rescue companies have really been Florida lose-your-house-and-make-us-rich companies.
It’s getting embarrassing for the Sunshine State. Three weeks ago, the Federal Trade Commission announced lawsuits against six foreclosure prevention operations
deemed to be crooked.

Five of them — 83 percent —were in Florida. Most took large fees from desperate homeowners up front, and performed little or no rescue work in return.
That’s supposed to change starting Jan. 1 in the biggest overhaul to the Florida mortgage brokerage business in decades.
The goals are laudable: No more fly-by-night correspondence lenders. No more Twitchy Tim’s Homes R Us. No more ex-convicts renting out shop fronts to advertise
their shady services.
These mud-sucking bottom feeders will continue to exist, but the state hopes to pin them in the spotlight of the new regulations.
What do the new lending laws mean for Average Joe Tampa Bay Homeowner? Here are some of the biggest changes:
• With a few exceptions, foreclosure rescue/loan modification shops will be the preserve of licensed mortgage brokers. Lawyers can continue to represent homeowners
with banks as long as it’s not a primary business but a sideline of other legal work.
• The new rules reaffirm and strengthen the state’s ban on up-front fees for foreclosure rescue operations. Only when the loan modification is concluded can a
mortgage broker collect a fee. And the deal must adhere to a clear written contract the broker provides upfront.
• The state plans to purge criminals, the unqualified and the uneducated from the ranks of mortgage brokers. The new rules provide for federally approved criminal
background checks, credit checks and state testing. You won’t get in the door without a high school diploma. Vaguely defined “moral turpitude” can get you disqualified.
Florida already had much of this in place, but the new rules are tougher.

• Previously unlicensed loan originators will need to get a license — or get out of town. During the housing gold rush in 2004-06, Florida lenders hired thousands of

originators. Often the only requirements were a pulse and a pair of shoes. Originators get too much blame for the real estate crash — they were front line grunts
without a grip on the purse strings — but they routinely flubbed their duty of sifting the credit-worthy from the deadbeat.
The rules have been two years in the works. Attorney General Bill McCollum’s office has filed 17 lawsuits against mortgage fraud or foreclosure rescue scams. The
Federal Trade Commission’s dramatically named “Operation Stolen Hope” released a partial list questionable Florida operators: Crowder Law Group, Crossland Credit
Counseling Corp., Home Assure LLC, First Union Lending, Truman Foreclosure Assistance and Safe Harbour Foundation of Florida.
In the animal kingdom, the proverbial lion preys on the proverbial wounded gazelle. The fact that we even needed the new Jan. 1 rules proves what callous beasts some
of us can be.
James Thorner can be reached at (813) 226-3313


Will the proposed Cap and Tax legislation require extensive energy upgrades on home resales?

The National Association of Realtors (NARissued a “Myths and Facts” memorandum with regard to HR 2454. Fortunately,  this bill only indicates that federal funding would be offered as incentives for owners of existing properties to voluntarily improve the energy efficiency of their structures:
HR 2454 does not require that buildings be energy retrofitted. Idoes however provide for federal funding to states in order that they may offer financial incentives, such as loans or grants, to property owners who voluntarily improve the energy efficiency of their propertyThere are guidelines and conditions to meet in order to receive funding and also with regard to exactly how states may spend the money. Some type of verification that the energy improvements have been properly made will be required to help ensure against fraud
In sum, at least at this point, there are no point-of-sale guidelines or any other such requirements of any sort. Of course, this bill has only been passed by the House. It must still be passed by the Senate and then signed by the President to become law. It may not happen at all. Time will tell.

Treasury Announces Short Sale Changes

 The U.S. Treasury Department under the Making Home Affordable program has released a plan to speed up and encourage Short Sales as a means to help families avoid foreclosure. RE/MAX International has been heavily involved in efforts to streamline Short Sale proposals for over a year, and although the new guidelines aren’t everything we would hope for, they do represent a significant improvement over the current situation.
Short Sales have been difficult to close, and these new measures are a huge step in the right direction. One major highlight: A lender must give a yes or no answer to an offer within 10 days.
Also included: a moving allowance, incentives for sellers and lenders, commission rules, and a stipulation that releases sellers from debt liabilities.
The Treasury Department has finally announced their finalized rules for SHORT SALES under the Making Home Affordable program.
In a nutshell:
· Mandatory consideration of short sale after HAMP, before foreclosure
· Pre-approved terms from servicer before property listing
· 10 days for servicer to accept/reject offers

· Agents commission protected

· Incentive payments to servicers

· Relocation allowance to borrower

· Guidelines and system to try and clear second lien roadblocks

· Servicers must implement by April 5, 2010

 Unofficially, some folks at FANNIE MAE have indicated that between now and April, Fannie will be rolling out PILOT PROGRAMS in CALIFORNIA and FLORIDA that will follow similar if not exactly the same rules. Based on these pilots, Fannie and Treasury will tweak these rules as necessary before the national roll out in April.

 Here’s an initial Reuters news story <>  outlining the new policies.

Here is the announcement from Treasury <>  and the actual guidelines as published in Supplemental Directive 09-09 <>

Also, here is a short article in DS News that summarizes things <>