Delaware Code Title 6 Sec. 2413B – Foreclosure consulting contract
(a) A foreclosure consulting contract shall be in writing and provided to the homeowner, without changes, alterations, or modification, for review at least 24 hours before it signed by the homeowner.
Terms Used In Delaware Code Title 6 Sec. 2413B
- Contract: A legal written agreement that becomes binding when signed.
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Document: means :
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Foreclosure consultant: means a person who:
- Foreclosure consulting contract: means a written, oral, or equitable agreement between a foreclosure consultant and a homeowner for the provision of any foreclosure consulting service or foreclosure reconveyance. See Delaware Code Title 6 Sec. 2402B
- Foreclosure purchaser: means a person who acquires title or possession of a deed or other document transferring title to a residence in foreclosure as a result of a foreclosure reconveyance. See Delaware Code Title 6 Sec. 2402B
- Foreclosure reconveyance: means a transaction involving:
- Homeowner: means the record owner of a residence in default or a residence in foreclosure. See Delaware Code Title 6 Sec. 2402B
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Residence in default: means residential real property consisting of not more than 4 single-family dwelling units, 1 of which is occupied by the owner as the individual's principal place of residence, and on which the mortgage is at least 60 days in default. See Delaware Code Title 6 Sec. 2402B
- United States: includes its territories and possessions and the District of Columbia. See Delaware Code Title 1 Sec. 302
- Year: means a calendar year, and is equivalent to the words "year of our Lord. See Delaware Code Title 1 Sec. 302
(b) A foreclosure consulting contract shall be printed in at least 12-point type and shall include the name and address of the foreclosure consultant to which a Notice of Cancellation can be mailed and the date the homeowner signed the contract.
(c) A foreclosure consulting contract shall fully disclose the exact nature of the foreclosure consulting services to be provided and the total amount and terms of any compensation to be received by the foreclosure consultant.
(d) A foreclosure consulting contract shall be dated and personally signed, with each page being initialed, by both the homeowner of the residence in default and the foreclosure consultant and shall be witnessed and acknowledged by a notary public in the presence of the homeowner at the time the contract is signed by the homeowner.
(e) A foreclosure consulting contract shall contain the following notice, which shall be printed in at least 14-point bold-face type, completed with the name of the foreclosure consultant, and located in immediate proximity to the space reserved for the homeowner’s signature:
NOTICE REQUIRED BY DELAWARE LAW
[Name of foreclosure consultant] or anyone working for that company or individual CANNOT ask you to sign or have you sign any lien, mortgage or deed as part of signing this agreement unless the terms of the transfer or encumbrance are specified in this document and you are given a separate explanation of the precise nature of the transaction.
[Name of foreclosure consultant] or anyone working for that company or individual CANNOT guarantee you that they will be able to refinance your home or arrange for you to keep your home. Continue making mortgage payments until a refinancing, if applicable, is approved.
You may at any time cancel this contract, without penalty of any kind. If you want to cancel this contract, mail or deliver a signed and dated copy of the Notice of Cancellation, or any other written notice indicating your intent to cancel, to [name and address of the foreclosure consultant].
As part of any cancellation, you, the homeowner, must repay any money actually spent on your behalf by [name of foreclosure consultant] prior to receipt of this notice and as a result of this agreement, within sixty days, along with interest at the primary credit rate established by the United States Federal Reserve Board plus 2 percentage points, with the total interest rate not to exceed 8% per year.
THIS IS AN IMPORTANT LEGAL CONTRACT AND COULD RESULT IN THE LOSS OF YOUR HOME. CONTACT AN ATTORNEY FOR LEGAL ADVICE OR A HOUSING COUNSELOR APPROVED BY THE FEDERAL DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FOR OTHER OPTIONS WITH YOUR LENDER BEFORE SIGNING.
(f) A completed form in duplicate, entitled “NOTICE OF CANCELLATION”, shall accompany the foreclosure consulting contract. The Notice of Cancellation shall:
(1) Be on a separate sheet of paper attached to the contract;
(2) Be easily detachable; and
(3) Contain the following statement, printed in at least 14-point type:
NOTICE OF CANCELLATION
Date of Contract: [Contract date]
To: __[Name of foreclosure consultant]
____ [Address of foreclosure consultant]
________________
I hereby cancel this contract.
[Signature date] ________________________________________________[Homeowner’s signature]
________________
(g) A notice of cancellation need not take the particular form specified in this subchapter or any form contained in any agreement with the foreclosure consultant, and is effective, however expressed, if it indicates the intention of the homeowner to cancel the foreclosure consulting contract.
(h) If a foreclosure reconveyance is included in a foreclosure consulting contract or arranged after the execution of a foreclosure consulting contract, the foreclosure purchaser shall provide the homeowner with a document entitled “NOTICE OF RIGHT TO RESCIND TRANSFER OF DEED OR TITLE” in the form required under subchapter III of this chapter.
(i) The foreclosure consultant shall provide to the homeowner a signed, dated, and acknowledged copy of the foreclosure consulting contract and the attached Notice of Cancellation immediately upon execution of the contract.