(1) PROHIBITED ACTS.–When offering or providing loan modification services, a loan originator, mortgage broker, or mortgage lender may not:

(a) Engage in or initiate loan modification services without first executing a written agreement for loan modification services with the borrower;

Terms Used In Florida Statutes 494.00296

  • Affidavit: A written statement of facts confirmed by the oath of the party making it, before a notary or officer having authority to administer oaths.
  • Borrower: means a person obligated to repay a mortgage loan and includes, but is not limited to, a coborrower or cosignor. See Florida Statutes 494.001
  • Commission: means the Financial Services Commission. See Florida Statutes 494.001
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
  • Loan modification: means a modification to an existing loan. See Florida Statutes 494.001
  • Loan originator: means an individual who, directly or indirectly, solicits or offers to solicit a mortgage loan, accepts or offers to accept an application for a mortgage loan, negotiates or offers to negotiate the terms or conditions of a new or existing mortgage loan on behalf of a borrower or lender, or negotiates or offers to negotiate the sale of an existing mortgage loan to a noninstitutional investor for compensation or gain. See Florida Statutes 494.001
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Mortgage broker: means a person conducting loan originator activities through one or more licensed loan originators employed by the mortgage broker or as independent contractors to the mortgage broker. See Florida Statutes 494.001
  • Mortgage lender: means a person making a mortgage loan or servicing a mortgage loan for others, or, for compensation or gain, directly or indirectly, selling or offering to sell a mortgage loan to a noninstitutional investor. See Florida Statutes 494.001
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • person: includes individuals, children, firms, associations, joint adventures, partnerships, estates, trusts, business trusts, syndicates, fiduciaries, corporations, and all other groups or combinations. See Florida Statutes 1.01
  • Trial: A hearing that takes place when the defendant pleads "not guilty" and witnesses are required to come to court to give evidence.
(b) Execute a loan modification without the consent of the borrower after the borrower is made aware of each modified term; or
(c) Solicit, charge, receive, or attempt to collect or secure payment, directly or indirectly, for loan modification services before completing or performing all services included in the agreement for loan modification services. A fee may be charged only if the loan modification results in a material benefit to the borrower. The commission may adopt rules to provide guidance on what constitutes a material benefit to the borrower.
(2) LOAN MODIFICATION AGREEMENT.–

(a) The written agreement for loan modification services must be printed in at least 12-point uppercase type and signed by both parties. The agreement must include the name and address of the person providing loan modification services, the exact nature and specific detail of each service to be provided, the total amount and terms of charges to be paid by the borrower for the services, and the date of the agreement. The date of the agreement may not be earlier than the date the borrower signed the agreement. The mortgage broker or mortgage lender must give the borrower a copy of the agreement to review at least 1 business day before the borrower is to sign the agreement.
(b) The borrower has the right to cancel the written agreement without any penalty or obligation if the borrower cancels the agreement within 3 business days after signing the agreement. The right to cancel may not be waived by the borrower or limited in any manner by the loan originator, mortgage broker, or mortgage lender. If the borrower cancels the agreement, any payments made must be returned to the borrower within 10 business days after receipt of the notice of cancellation.
(c) An agreement for loan modification services must contain, immediately above the signature line, a statement in at least 12-point uppercase type which substantially complies with the following:

BORROWER’S RIGHT OF CANCELLATION

YOU MAY CANCEL THIS AGREEMENT FOR LOAN MODIFICATION SERVICES WITHOUT ANY PENALTY OR OBLIGATION WITHIN 3 BUSINESS DAYS AFTER THE DATE THIS AGREEMENT IS SIGNED BY YOU.

THE LOAN ORIGINATOR, MORTGAGE BROKER, OR MORTGAGE LENDER IS PROHIBITED BY LAW FROM ACCEPTING ANY MONEY, PROPERTY, OR OTHER FORM OF PAYMENT FROM YOU UNTIL ALL PROMISED SERVICES HAVE BEEN COMPLETED. IF FOR ANY REASON YOU HAVE PAID THE CONSULTANT BEFORE CANCELLATION, YOUR PAYMENT MUST BE RETURNED TO YOU WITHIN 10 BUSINESS DAYS AFTER THE CONSULTANT RECEIVES YOUR CANCELLATION NOTICE.

TO CANCEL THIS AGREEMENT, A SIGNED AND DATED COPY OF A STATEMENT THAT YOU ARE CANCELING THE AGREEMENT SHOULD BE MAILED (POSTMARKED) OR DELIVERED TO   (NAME)   AT   (ADDRESS)   NO LATER THAN MIDNIGHT OF   (DATE)  .

IMPORTANT: IT IS RECOMMENDED THAT YOU CONTACT YOUR MORTGAGE LENDER OR MORTGAGE SERVICER BEFORE SIGNING THIS AGREEMENT. YOUR LENDER OR SERVICER MAY BE WILLING TO NEGOTIATE A PAYMENT PLAN OR A RESTRUCTURING WITH YOU FREE OF CHARGE.

(d) The inclusion of the statement does not prohibit a loan originator, mortgage broker, or mortgage lender from giving the homeowner more time to cancel the agreement than is set forth in the statement if all other requirements of this subsection are met.
(e) The person offering or providing the loan modification services must give the borrower a copy of the signed agreement within 3 hours after the borrower signs the agreement.
(3) REMEDIES.–

(a) Without regard to any other remedy or relief to which a person is entitled, anyone aggrieved by a violation of this section may bring an action to obtain a declaratory judgment that an act or practice violates this section and to enjoin a person who has violated, is violating, or is otherwise likely to violate this section.
(b) In any action brought by a person who has suffered a loss as a result of a violation of this section, such person may recover actual damages, plus attorney’s fees and court costs, as follows:

1. In any action brought under this section, upon motion of the party against whom such action is filed alleging that the action is frivolous, without legal or factual merit, or brought for the purpose of harassment, the court may, after hearing evidence as to the necessity therefor, require the party instituting the action to post a bond in the amount that the court finds reasonable to indemnify the defendant for any damages incurred, including reasonable attorney’s fees.
2. In any civil litigation resulting from an act or practice involving a violation of this section, the prevailing party, after judgment in the trial court and exhaustion of all appeals, if any, may receive reasonable attorney’s fees and costs from the nonprevailing party.
3. The attorney for the prevailing party shall submit a sworn affidavit of time spent on the case and costs incurred for all the motions, hearings, and appeals to the trial judge who presided over the civil case.
4. The trial judge may award the prevailing party the sum of reasonable costs incurred in the action plus a reasonable legal fee for the hours actually spent on the case as sworn to in an affidavit.
5. Any award of attorney’s fees or costs becomes part of the judgment and is subject to execution as the law allows.
(c) The provisions of this subsection do not apply to any action initiated by the enforcing authority.
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