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It’s sad but true that all too often home owners already facing the stress and difficulties of becoming delinquent in their mortgage payments and facing the consequences of that delinquency – losing their home, their credit rating, dealing with bill collection efforts, etc. – then fall prey to the additional stress of being the victims of criminal scam artists.

Mortgage Help or Scam Artist?

Well meaning Florida home owners have time and again been victimized by companies and individuals that offer to help them bear the burden of their situation and to negotiate and even work to modify their home mortgage with their lender.  What a help, right?  Except all too often, these are evildoing con artists that do not help the Florida home owner but instead just end up added more stress, more anxiety to the situation as well as actually doing financial harm to an already hurting Florida family.

Legitimate Florida Loan Modification Services

Florida law was passed to deal with these bad guys.  In 2008, the Foreclosure Rescue Fraud Prevention Act become Florida law and it makes it illegal for anyone (either an individual or a company) that sets itself up as in the business of  “foreclosure rescue” or “mortgage loan modification” from getting paid until they’ve done the work shown in their deal with the Florida mortgage holder.  In other words, these guys cannot collect up-front fees; they get paid when their work, as outlined in their contract, is done.  And, yes, under the new law, this kind of work has to be done with a written contract.  No handshake deals.  No verbal agreements.

Starting in 2010, loan modification services companies (or individuals) have to be approved and licensed by Florida Office of Financial Regulation.

Read the Florida law online here.

As for the contract itself, legitimate Foreclosure Help companies must have a contract that is signed by both the company representative and the homeowner; it has to have a clear and specifically worded right to cancel the deal so the homeowner can nix the deal; and it must have other disclosures of what these companies can and cannot legally do and accomplish for the home owner.

Importantly, these mortgage loan modification and foreclosure rescue companies cannot make a deal with the lender that is blatantly unfair for the strapped Florida home owner.  In other words, the repurchase price cannot be unconscionable.

What’s that?  Well, the Florida Legislature has presumed a repurchase price is unconscionable (unfair as a matter of law) if it is 17% per year of the total amount of money paid to buy the home (or to improve it, maintain it, etc.).

Larry’s Tip

This law applies to all businesses located within Florida as well as any business operating out of another state that is offering to help Florida home owners or those with Florida mortgages.  Which means, anyone offering to help someone in Florida via a web site must abide by these laws if they want to do business with Floridians.

The protection is wide.  If you are have a Florida home loan mortgage, then you are protected in any dealings where they offer to work with the lender on your behalf or they offer to buy the house, then lease the home to you with an option for you to buy it back from them at some future time; repurchase the property after a period of time.

Watch out for these kinds of advertisements on television or in emails or snail mail correspondence (the scam artists are known to monitor foreclosure filings to get names and addresses of potential victims) that include the following pitches:

“Stop foreclosure now!”

“Get a loan modification!”

“Keep Your Home!”

Recognize that your choice in foreclosure help will have consequences for you – good or bad.  In an emotional time, and anyone involved in a delinquent mortgage or strategic default knows that this is a stressful situation, it’s important to take care in making decisions.  Do not fall victim to these scammers and con artists.  Law exists to protect you, but the better road to take is choosing a reputable, experienced, and respected advocate to help you deal with your mortgage lender.  Foreclosure defense attorneys, short sale lawyers, and other legal professionals are not as expensive as you may think and may well be your best option.  Be careful out there.

If you have questions or comments, please feel free to Chat with Larry in the comments below, at or (954) 458-8655.

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