If you’re in Florida or investing in properties there, you need to be aware of this new law that’s going into effect on October 1st, 2008.The Government’s intention is to protect homeowners in foreclosure from falling victim to deadbeat investors that steal people’s money and don’t follow through with what they promise. It’s these types of investors that ruin our reputation as a whole.
If you’re not in Florida, you need to pay attention to this because they’re trying to pass something very similar to this on the federal level.What the government doesn’t realize is that this is going to cause even more foreclosures and it’s going to hurt homeowners rather than help them.
This new bill will force all of the deadbeat investors that operate without integrity to get out of the business or comply with the law. The Bill prohibits taking money up front before services are performed. This is referring to forbearances, workout agreements, loan mods, etc.
You don’t know how many homeowners that say that they gave an investor $1000 or a payment equal to 1 month mortgage payment to negotiate with their lender for them and they never hear from that investor again. Homeowners don’t deserve to be treated like this and I’m so happy they included this in the bill.
This is going to weed out the scam artists. It also says that it treats a leaseback transaction as a loan and also requires the investor to prove that the homeowner can afford the payment before they into a lease option or repurchase agreement to buy the home back.
Stay away from leasebacks period and this will not apply to you!!!They are too much headache. Stick with short sales.
The new law also requires you to provide all of the paperwork to the homeowner at least 1 day before they sign the agreements and you must provide the homeowner 3 days cooling off period to cancel the agreement. This is very similar to a REFI.
They included this to prevent homeowners from signing documents under a high pressure situation and I think this is a good idea. They also included this to make sure there is an actual written agreement in place for the transaction.
It also says that once the homeowner transfers the property to you, you assume all liability of the debt on the property.
Restructure your paperwork because of this and have an attorney draft a new disclosure to make sure you are in compliance with this new law. We see this new law as a very good thing for everyone because it’s going weed out the bad apples.
AVC Financial Group