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New Law Offers Protection Against Foreclosure Fraud

October 1st, 2008 by flanews

One of 30 new state laws taking affect today will offer Floridians some protection against predatory lending. The Foreclosure Fraud Prevention Act gives borrowers three days to back out of a refinancing agreement and as Whitney Ray tells us, it requires lenders to encourage borrowers to work with their bank before signing a new deal.

Hear it Here: New Law Offers Protection Against Foreclosure Fraud

This is a typical Florida neighborhood, brick homes evenly spaced apart, cookie cutter mailboxes, and for sale signs on each side of the road. Florida has the second highest foreclosure rate in the country. Last year more than 240,000 Floridians lost their homes.

Florida also has the highest mortgage fraud rate. Attorney General Bill McCollum said Floridians are being scammed.

Were having too many people trying to scam people out there and citizens of Florida, said McCollum.

A new state law on the books Wednesday produces extra hurdles for scam artists who claim they can save a home from foreclosure. The law gives borrowers three days to back out of a foreclosure rescue loan. It also requires lenders to tell borrowers about other options.

Theyre going to have to tell them that they recommend highly that they go see their loan officer, the bank or mortgage company that loaned them the money to see if they cant renegotiate that, before they take up the rescue teams proposal, said McCollum.

Governor Charlie Crist said the new law can be effective.

Its great to have laws on the books that are affective, that strive to help people, especially in these hard economic times. But youve got to enforce those laws, said Crist.

When asked if more could be done to help people facing foreclosure, the Governor suggested more immediate relief needs to come from Washington. The new law requires the three day cancelation period and the recommendation that borrowers can seek other options, be written into the new agreement in large bold font.

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